Expanding global carbon regulations and stricter reporting requirements that include indirect greenhouse gas (GHG) emissions, such as Scope 2 and 3, could substantially increase supply chain carbon risks for South Korean companies, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).
Scope 1 emissions are associated with direct inputs to a production process and are under the control of a manufacturing company. Scope 2 emissions arise indirectly from purchased energy and inputs needed to produce a product, and Scope 3 emissions represent the embedded carbon from Scope 1 and 2 activities that were required to manufacture finished goods.
“The inclusion of indirect GHG emissions, such as Scope 2 and 3, could substantially increase supply chain carbon risks, including investment aversion, higher carbon cost exposure, and counterparty and reputational risks,” says report author Michelle (Chaewon) Kim, IEEFA’s Energy Finance Specialist, South Korea.
IEEFA’s analysis shows that South Korea’s leading chip maker, Samsung Device Solutions (DS), recorded Scope 1–3 emissions of approximately 41 million metric tonnes of carbon dioxide equivalent (MtCO2e) in 2024 — the highest among seven major global tech companies — with a carbon intensity of 539 tCO2e per USD million of revenue.
