Leveraging TPRM (Third-Party Risk Management) to unlock sustainability

For most companies today, their biggest environmental impact doesn’t stem from internal operations - it lies within their supply chain. Scope 3 emissions frequently account for over 80%, and often over 90%, of a company’s total carbon footprint. These emissions include all indirect emissions across the value chain - from purchased goods and services to downstream distribution, use, and disposal. Scope 3 is the hardest category to measure, but it’s also the most critical to address.

But Scope 3 is not just an environmental issue - it’s a business resilience issue. Increasingly, the pressure to disclose and act on Scope 3 is merging with broader operational risk priorities, making this a pivotal moment to embed sustainability into Third-Party Risk Management (TPRM).

Regulatory momentum and business pressure

Scope 3 disclosure is moving from voluntary to mandatory. In the U.S., California’s Climate Corporate Data Accountability Act requires Scope 3 reporting by 2027. The EU’s CSRD and international alignment with ISSB standards are accelerating these requirements globally.

But for sustainability teams already stretched thin, with limited budgets and fragmented influence across the organization, meeting these requirements in isolation is impractical.

This is where TPRM offers an efficiency unlock. By rolling sustainability metrics into existing TPRM frameworks (alongside cyber, financial, and operational risk) companies can leverage synergies across functions like IT risk, procurement, compliance, and operations to accelerate Scope 3 efforts and address regulatory expectations more holistically.

By rolling sustainability metrics into existing TPRM frameworks companies can leverage synergies across functions to accelerate Scope 3 efforts and address regulatory expectations more holistically.

The case for integration: Sustainability as risk intelligence

TPRM programs are designed to assess and manage external dependencies (vendors, suppliers, partners) across multiple risk categories. Increasingly, these programs are evolving beyond traditional compliance checklists to cover:

• Cybersecurity and data protection
• Geopolitical and supply chain concentration risks
• Operational resilience and financial stability
• Reputational risk and ESG performance

Sustainability fits naturally here. Scope 3 emissions are not just environmental metrics - they are proxies for systemic vulnerabilities. For example:

• A high-emitting supplier may also be exposed to transition risk, facing regulatory penalties or obsolescence.
• Suppliers with no climate strategy may also lack cyber maturity or business continuity plans, making them weak points under EU DORA and other operational resilience regimes.
• A regionally concentrated supplier base with poor environmental data could amplify geopolitical risk and reputational exposure during crises.

By treating Scope 3 as another lens of third-party risk, sustainability teams can piggyback on existing TPRM assessments and governance mechanisms, creating leverage instead of duplicating effort.

From data collection to cross-functional action

Many companies begin Scope 3 reporting using spend-based data, but improving accuracy means moving toward supplier-specific or activity-based methods. The path to more granular emissions data overlaps heavily with traditional supplier risk evaluations, creating a clear opportunity to:

• Use existing procurement and onboarding workflows to request sustainability data.
• Incorporate climate maturity into supplier risk scoring models.
• Leverage IT and cyber risk tools to automate third-party evaluations, including environmental criteria.
• Use concentration risk mapping to identify Scope 3 hotspots that also carry financial or operational exposure.

In essence, Scope 3 data can act as an early-warning system, highlighting not only climate-related risk, but also resilience gaps across your extended enterprise.

Practical leverage for under-resourced sustainability teams

For sustainability teams with limited resources, embedding into TPRM offers:

• Shared platforms: Use existing TPRM tools to collect and manage ESG data.
• Cross-functional governance: Tap into vendor risk committees and operational resilience forums to raise ESG priorities.
• Regulatory alignment: Position Scope 3 within broader regulatory frameworks like Operational Resilience, and global supply chain transparency laws.
• Co-investment: Influence spend and risk decisions at the source, rather than trying to retrofit ESG after contracts are signed.

Moving from static compliance to strategic resilience

The end goal isn’t just reporting emissions. It’s about using Scope 3 data to:

• Build more resilient supply chains
• Prioritize supplier decarbonization in critical areas
• Enhance vendor selection and long-term planning
• Respond to regulatory scrutiny with confidence and agility

By aligning sustainability with TPRM, companies can avoid reinventing the wheel and instead create a shared infrastructure for monitoring third-party performance across environmental, cyber, operational, and reputational dimensions.

By aligning sustainability with TPRM, companies can avoid reinventing the wheel and instead create a shared infrastructure for monitoring third-party performance across environmental, cyber, operational, and reputational dimensions.

Conclusion: Scope 3 as strategic risk intelligence

Integrating Scope 3 into third-party risk management transforms a compliance burden into a business enabler. It turns ESG into a core element of risk intelligence - improving visibility, resilience, and value creation across the organization.

For sustainability teams under pressure, this isn’t just a tactical fix. It’s a strategic shift. A way to scale their impact, build internal allies, and deliver on both compliance and climate goals in a resource-constrained environment.

Because in the future, the companies that lead on Scope 3 won’t just be sustainable. They’ll be more resilient, more adaptive, and more competitive.

About Projective Group

Established in 2006, Projective Group is a leading Financial Services change specialist.

We are recognised within the industry as a complete solutions provider, partnering with clients in Financial Services to provide resolutions that are both holistic and pragmatic.  We have evolved to become a trusted partner for companies that want to thrive and prosper in an ever-changing Financial Services landscape.