Case study: Scope 3 supply chain decarbonization — a city or utility pilot and the results so far

The City of Copenhagen's municipal procurement office oversees roughly 15,000 supplier contracts worth approximately $3.8 billion annually, and in 2022 the city became one of the first municipalities in the world to embed mandatory Scope 3 emissions reporting and reduction requirements into its procurement framework. By the end of 2025, Copenhagen had collected verified emissions data from over 4,200 suppliers across construction, food services, transportation, and IT, reducing estimated Scope 3 procurement emissions by 24% against its 2019 baseline (City of Copenhagen, 2025). This case study examines how the Danish capital designed and scaled a municipal Scope 3 supply chain decarbonization program, the measured outcomes to date, and the lessons that other cities and utilities can apply.

Why It Matters

Scope 3 emissions, those generated across a purchasing organization's value chain rather than from its own operations, typically represent 70 to 90% of a city's or utility's total carbon footprint. For municipal governments, procurement-linked emissions often dwarf those from city-owned buildings and fleet vehicles combined. The C40 Cities network estimates that member cities collectively spend over $4.7 trillion annually on goods and services, with associated supply chain emissions exceeding 1.2 gigatons of CO2 equivalent per year (C40 Cities, 2024).

Regulatory pressure is accelerating. The EU's Corporate Sustainability Reporting Directive (CSRD), effective from fiscal year 2024, requires companies above certain thresholds to disclose Scope 3 emissions across 15 upstream and downstream categories. Denmark's national climate law commits the country to a 70% emissions reduction by 2030 relative to 1990 levels, a target that cannot be reached through direct emissions reductions alone. Municipal procurement represents one of the most powerful levers available to city governments: by requiring suppliers to measure, report, and reduce their emissions, cities can cascade decarbonization incentives deep into supply chains without passing new legislation.

For engineers and procurement professionals in emerging markets, where public procurement often constitutes 15 to 25% of GDP, Copenhagen's model offers a replicable blueprint for using purchasing power as a climate tool. Several cities in India, Brazil, and South Africa have begun adapting elements of the Copenhagen framework to their own procurement systems.

Key Concepts

Understanding Copenhagen's pilot requires familiarity with several frameworks that underpin municipal Scope 3 accounting and supplier engagement.

Scope 3 procurement categories: The GHG Protocol divides Scope 3 into 15 categories. Municipal procurement primarily generates emissions in Category 1 (purchased goods and services), Category 2 (capital goods), Category 4 (upstream transportation and distribution), and Category 5 (waste generated in operations). Copenhagen's program initially targeted Categories 1 and 2, which together account for approximately 82% of the city's procurement-linked emissions.

Spend-based vs. activity-based accounting: Spend-based methods estimate emissions by multiplying procurement expenditure by sector-average emission factors. Activity-based methods use supplier-specific data on energy consumption, materials, and processes. Copenhagen began with spend-based estimates for its full supplier base and progressively transitioned its top 500 suppliers (by emissions intensity) to activity-based reporting over a three-year period.

Environmental product declarations (EPDs): Third-party-verified documents that quantify the environmental impact of a product across its lifecycle. Copenhagen requires EPDs for all construction materials procured above a value threshold of DKK 5 million (approximately $720,000), creating a standardized data layer for embodied carbon comparisons.

Climate partnership agreements: Contractual addenda that bind suppliers to specific emissions reduction trajectories, typically requiring 4 to 6% annual reductions aligned with science-based targets. Non-compliance triggers escalation procedures rather than immediate contract termination, reflecting the city's emphasis on transition support over punitive enforcement.

What's Working

Copenhagen's Scope 3 procurement program has delivered measurable results across data quality, emissions reductions, and supplier capacity building.

Supplier Data Coverage Has Scaled Rapidly

When the program launched in 2022, only 8% of the city's supplier base could provide any form of emissions data beyond basic energy bills. By Q4 2025, 67% of suppliers by contract value provide at least spend-based emissions estimates, and 38% of the top 500 suppliers submit activity-based data with third-party verification. The city's digital procurement platform, built on the Open Contracting Data Standard, automates data collection by integrating with supplier sustainability management systems from providers like Normative, Watershed, and Plan A. Data submission rates increased sharply after Copenhagen embedded emissions reporting as a scored criterion in tender evaluations, weighting it at 15 to 20% of total evaluation scores (City of Copenhagen, 2025).

Construction Sector Emissions Are Declining

Construction and infrastructure account for 44% of Copenhagen's procurement-linked Scope 3 emissions. The city's requirement for EPDs on major construction material purchases, combined with a 20% weighting for embodied carbon in tender scoring, has shifted material choices measurably. Concrete suppliers bidding on Copenhagen contracts have reduced the average carbon intensity of delivered concrete from 290 kg CO2e per cubic meter in 2021 to 218 kg CO2e per cubic meter in 2025, a 25% reduction driven primarily by increased use of supplementary cementitious materials, optimized mix designs, and lower-clinker cements. The city's new Nordhavn district development, a 40-hectare mixed-use project, achieved 32% lower embodied carbon than comparable Copenhagen developments completed in 2020 (Ramboll, 2025).

Food Services Procurement Has Shifted Sourcing

Copenhagen's municipal food services operation, which provides 90,000 meals daily across schools, hospitals, and elder care facilities, restructured its supplier contracts to require lifecycle emissions data per kilogram of delivered product. This data transparency enabled procurement officers to substitute high-emission protein sources with lower-emission alternatives without compromising nutritional requirements. Beef procurement volumes decreased by 38% between 2022 and 2025, replaced primarily by Danish-grown legumes, poultry, and plant-based proteins. The food services portfolio's emissions intensity dropped from 3.2 kg CO2e per meal to 2.1 kg CO2e per meal, a 34% reduction, while per-meal costs increased by only 2.8% (Copenhagen Food Administration, 2025).

Small Supplier Engagement Is Improving

The city partnered with the Danish Chamber of Commerce and the Danish Business Authority to create a free Scope 3 readiness program for SME suppliers. The program provides simplified carbon accounting tools, sector-specific guidance documents, and group workshops. As of 2025, 1,800 SME suppliers have completed the program, and participating SMEs demonstrate data submission compliance rates of 72% compared to 41% for non-participants.

What's Not Working

Despite strong progress, persistent challenges constrain the program's depth and replicability.

Data Quality Remains Uneven

While coverage has expanded, the accuracy of supplier-reported data varies substantially. An independent audit by KPMG in 2024 found that 28% of supplier emissions reports contained material errors, defined as deviations exceeding 20% from auditor-estimated figures. Common issues include incorrect emission factor selection, double-counting of shared logistics emissions, and inconsistent system boundaries. The city has responded by requiring third-party verification for suppliers above a contract value threshold, but verification costs of $5,000 to $15,000 per supplier create friction, particularly for mid-tier companies that fall above the SME support threshold but lack the resources of large corporations (KPMG, 2024).

Upstream Visibility Beyond Tier 1 Is Limited

Copenhagen's program effectively captures emissions data from direct (Tier 1) suppliers, but most procurement-linked emissions originate further upstream. A construction material supplier can report its own manufacturing emissions, but the mining, refining, and transportation of raw material inputs, often spanning multiple countries, remains opaque. The city estimates that Tier 1 data captures approximately 55 to 65% of true lifecycle emissions for construction materials and only 40 to 50% for electronics and IT equipment. Extending data requirements to Tier 2 and beyond would require supply chain traceability infrastructure that most suppliers have not implemented.

Supplier Concentration Creates Transition Risk

In several procurement categories, the number of suppliers capable of meeting Copenhagen's emissions reporting and reduction requirements is small. In specialized construction materials, only 3 of 12 pre-qualified suppliers currently meet the EPD and carbon intensity requirements for new tenders. This concentration reduces competitive tension and has contributed to price premiums of 8 to 12% on low-carbon construction materials compared to conventional alternatives. The city faces a tension between maintaining stringent climate criteria and ensuring procurement competitiveness.

Emerging Market Suppliers Face Structural Barriers

Copenhagen's framework was designed for a Northern European context where digital infrastructure, regulatory alignment with the CSRD, and access to verified emission factors are relatively mature. When the city attempted to extend equivalent requirements to suppliers in India and Southeast Asia, compliance rates dropped to below 15%. Grid emission factors, a critical input for manufacturing-related Scope 3 calculations, are unreliable or unavailable in many emerging market jurisdictions. Language barriers, different accounting standards, and limited access to verification services compound the problem.

Key Players

Established Companies

• Ramboll: Provides lifecycle assessment and embodied carbon consulting services for Copenhagen's major infrastructure projects, including the Nordhavn development.
• KPMG Denmark: Conducts third-party verification audits of supplier emissions reports under the city's quality assurance framework.
• NCC Group: One of the largest construction contractors operating under Copenhagen's EPD and carbon intensity requirements, achieving a 28% reduction in portfolio-average embodied carbon since 2021.
• ISS A/S: Provides facility management services across Copenhagen's municipal buildings, with integrated Scope 3 reporting covering cleaning, catering, and maintenance supply chains.
• Aarsleff: A major Danish civil engineering contractor that developed a digital EPD management system to comply with Copenhagen's construction procurement requirements.

Startups

• Normative: A Swedish carbon accounting platform used by Copenhagen to automate spend-based emissions calculations across the full supplier base, integrating with the city's ERP system.
• Plan A: Berlin-based sustainability platform providing activity-based emissions tracking tools to Copenhagen's top-tier suppliers, with automated data validation against industry benchmarks.
• CarbonChain: Provides commodity-level carbon footprint tracking for raw materials and semi-finished goods, helping Copenhagen extend visibility beyond Tier 1 suppliers in metals and minerals procurement.

Investors and Funders

• European Investment Bank (EIB): Provided a EUR 50 million green loan facility supporting Copenhagen's low-carbon infrastructure procurement, with interest rate reductions tied to verified Scope 3 reduction milestones.
• C40 Cities Finance Facility: Funded the initial program design and pilot phase, including the development of the digital procurement platform and supplier training curriculum.
• Danish Ministry of Climate, Energy and Utilities: Co-funds the SME supplier readiness program through the national Green Transition Fund, contributing DKK 22 million ($3.2 million) over three years.

KPI Summary

KPI	Baseline (2019)	Current (2025)	Target (2028)
Suppliers providing emissions data (% by contract value)	8%	67%	90%
Top 500 suppliers with activity-based data	0%	38%	70%
Scope 3 procurement emissions reduction vs. baseline	0%	24%	45%
Concrete carbon intensity (kg CO2e/m3)	290	218	175
Food services emissions intensity (kg CO2e/meal)	3.2	2.1	1.6
SME suppliers completing readiness program	0	1,800	4,000
Supplier data error rate (material errors)	N/A	28%	10%

Action Checklist

• Conduct a spend-based Scope 3 emissions baseline across all procurement categories to identify the highest-impact supplier segments for targeted engagement
• Integrate emissions reporting as a scored criterion in tender evaluations, starting with a 10 to 15% weighting and increasing as supplier readiness matures
• Require environmental product declarations for construction materials above a defined value threshold to standardize embodied carbon data collection
• Establish a free or subsidized carbon accounting support program for SME suppliers, partnering with chambers of commerce or industry associations to reduce barriers
• Build or procure a digital procurement platform that automates emissions data collection and integrates with existing ERP and contract management systems
• Implement third-party verification requirements for suppliers above a contract value threshold to improve data quality while managing verification cost burdens
• Develop climate partnership agreements with top suppliers that set annual reduction trajectories aligned with science-based targets, with escalation procedures rather than immediate termination for non-compliance

FAQ

Q: How does a city measure Scope 3 emissions from thousands of suppliers without overwhelming its procurement team? A: Copenhagen uses a tiered approach. For the full supplier base, spend-based emission factors from databases like Exiobase and DEFRA are applied automatically through the digital procurement platform, requiring no additional effort from procurement officers. For the top 500 suppliers by emissions contribution, the city requires activity-based data submitted through standardized templates. Only the top 100 suppliers face third-party verification requirements. This tiered model means that 80% of emissions coverage is achieved through automated calculations, while detailed engagement focuses on the suppliers that collectively drive the majority of the emissions footprint.

Q: What happens when a supplier cannot meet the emissions reporting requirements? A: Copenhagen's framework uses a phased compliance model rather than pass-fail screening. New suppliers that cannot yet provide emissions data receive a 12-month grace period during which they must complete the SME readiness program or engage a carbon accounting provider. Existing suppliers that miss reporting deadlines receive a formal notice and have 90 days to submit data before their status in the pre-qualified supplier registry is affected. Contract termination for emissions reporting non-compliance has occurred in fewer than 20 cases since the program launched, all involving suppliers that declined to engage with available support resources.

Q: Does requiring low-carbon procurement increase costs for the city? A: The cost impact varies by category. Construction materials with EPD requirements carry price premiums of 8 to 12% over conventional alternatives, though these premiums have narrowed from 15 to 20% when the program launched. Food services costs increased by 2.8% overall, partly offset by lower waste volumes. IT and office supplies have shown minimal cost impact because emissions-related scoring criteria correlate with energy efficiency, which reduces lifecycle costs. Copenhagen estimates that the total incremental cost of the Scope 3 procurement program across all categories is approximately 3.5% of total procurement spend, which the city council has accepted as a necessary investment against its 2030 climate targets.

Q: Can this model work in cities with less regulatory infrastructure? A: The core mechanics are transferable: spend-based baselining, tiered supplier engagement, and progressive tightening of requirements over time. However, several adaptations are needed for emerging market contexts. First, locally relevant emission factor databases must be developed or adopted, since European databases overestimate or underestimate emissions when applied to different energy grids and manufacturing processes. Second, supplier readiness programs need to be more extensive and may require direct funding for accounting tools. Third, enforcement mechanisms need to account for less mature digital procurement systems. Bogota, Cape Town, and Mumbai have each adapted elements of Copenhagen's approach, starting with construction procurement where EPD infrastructure is most developed and expanding to other categories as supplier capacity grows.

Sources

• City of Copenhagen. (2025). Green Procurement Strategy: Scope 3 Progress Report 2024-2025. Copenhagen: Municipality of Copenhagen.
• C40 Cities. (2024). The Power of Procurement: How Cities Can Use Purchasing to Drive Decarbonization. London: C40 Knowledge Hub.
• KPMG Denmark. (2024). Independent Assurance Report: Copenhagen Municipal Supplier Emissions Data Quality Assessment. Copenhagen: KPMG Statsautoriseret Revisionspartnerselskab.
• Ramboll. (2025). Nordhavn Development: Embodied Carbon Performance Assessment. Copenhagen: Ramboll Group A/S.
• Copenhagen Food Administration. (2025). Sustainable Meals Program: Emissions Intensity and Nutritional Outcomes Report. Copenhagen: Municipality of Copenhagen.
• Danish Ministry of Climate, Energy and Utilities. (2025). Green Transition Fund: Municipal Procurement Support Program Outcomes. Copenhagen: Danish Government.
• European Investment Bank. (2024). Green Loan Framework: Copenhagen Sustainable Infrastructure Facility. Luxembourg: EIB.
• GHG Protocol. (2024). Scope 3 Calculation Guidance for Public Sector Organizations. Washington, DC: World Resources Institute.