EcoVadis partners with Watershed on Scope 3 Data Solutions

For years, corporate climate teams have been assembling their Scope 3 emissions inventories from modelled estimates and sector averages, plugging approximations into reporting frameworks and trusting that regulators would not probe too deeply. That era is drawing to a close. EcoVadis partners with Watershed in a strategic alliance announced on March 12, 2026, that aims to replace those proxies with supplier-specific, primary carbon data at a scale the market has not previously seen. The deal pairs EcoVadis, the Paris-headquartered sustainability ratings provider whose network spans more than 150,000 companies across 250 industries, with Watershed, the San Francisco-based climate software platform valued at $1.8bn and backed by Greenoaks, Sequoia Capital and Kleiner Perkins.

The regulatory pressure behind the deal is mounting. The EU’s Corporate Sustainability Reporting Directive, though narrowed by the Omnibus I package approved in December 2025, still requires large in-scope companies to disclose Scope 1, 2 and 3 emissions. California’s SB 253 will mandate similar disclosures from companies with more than $1bn in revenue. Australia has approved phased-in climate reporting aligned with ISSB standards. In each jurisdiction, the message is the same: rough industry averages are no longer acceptable. The fact that EcoVadis partners with Watershed at precisely this moment is a commercial bet that demand for auditable supply chain carbon data is about to surge.

Under the collaboration, EcoVadis acts as what it calls the “primary data engine.” Its Carbon Data Network, built on the company’s Carbon Action Manager platform, collects supplier-reported carbon metrics and assigns each one of four reliability levels through automated cross-referencing, evidence checks and outlier detection. EcoVadis has also launched a Product Carbon Footprint Calculator, available free to suppliers including SMEs, covering 12 industrial sectors from plastics to electronics and offered in 13 languages.

Watershed provides the analytical layer. Its sustainability AI platform centralises the incoming data, models it for audit-ready reporting and feeds it into the decarbonisation workflows of enterprise clients such as Airbnb, FedEx and Visa. The division of labour is clean: EcoVadis collects and verifies, Watershed models and reports.

The partnership is not exclusive. EcoVadis partners with Watershed as part of a broader ecosystem strategy that already encompasses carbon accounting firms Sweep and Normative. A pilot with Sweep allowed their shared client SNCF, the French state railway, to gather carbon data from hundreds of suppliers with meaningfully less friction than previous approaches. The logic is infrastructural rather than proprietary: EcoVadis wants to be the shared data layer feeding multiple carbon accounting systems, not a single end-to-end platform. Dexter Galvin, SVP Climate at EcoVadis, has said that unlocking the next generation of Scope 3 reduction demands a level of data reliability that has historically been absent from the market. It is a bold claim, given that building trust in supplier-reported data has defeated far larger standardisation efforts in the past.

For Watershed, the arrangement addresses a notable gap in its offering. The company, founded in 2019 by former Stripe employees, raised $100m in its Series C and now manages more than 479 million tonnes of CO2 equivalent across its client portfolio. But like most carbon accounting platforms, it has historically relied on spend-based estimation for Scope 3, a methodology that corporate buyers and their auditors are growing increasingly uncomfortable with. Integrating primary data from EcoVadis shifts Watershed towards granular, supplier-level accounting for purchased goods and services. David Ban, Watershed’s Head of Data Partnerships, said the collaboration reflects the firm’s conviction that supplier-specific data sits at the core of genuine decarbonisation. It also deepens Watershed’s competitive moat in a climate software market where differentiation increasingly depends on data quality rather than dashboards.

The problem that EcoVadis partners with Watershed to tackle is sobering. Scope 3 emissions typically represent roughly 75 per cent of a company’s total carbon footprint, yet more than 80 per cent of businesses struggle to quantify them with any confidence. Only 16% of the world’s largest corporations are on track to meet their net zero pledges. The EU’s Carbon Border Adjustment Mechanism has added further urgency by attaching a direct financial cost to imprecise emissions accounting.

Still, scepticism is warranted. EcoVadis partners with Watershed on the premise that tens of thousands of small and mid-sized suppliers will voluntarily adopt new reporting tools, submit credible data and accept external reliability scoring. The PCF Calculator may be free, but for a components manufacturer in Shenzhen or a packaging supplier in eastern Poland, it represents yet another compliance obligation in an already crowded landscape. EcoVadis has added 25,000 newly rated companies to its network in the past year, which suggests appetite exists, but there is a considerable distance between a sustainability rating and a verified product-level carbon footprint. The four-tier reliability framework is a useful innovation, yet it invites the question of how much incoming data will cluster at the lower, less decision-useful levels. For procurement directors navigating disclosure deadlines, carbon border levies and tightening assurance requirements, the alliance offers a credible path from estimation towards measurement. Whether the supply chain follows them down it remains the harder question.