A Triangulated Audit Framework for Auditing Scope 3 Supply Chain Disclosures in Capital Markets

• Abi cit

  Lautech

  Author

Scope 3 greenhouse gas (GHG) emissions represent 87% of total corporate emissions yet remain systematically unaudited in capital markets, creating an assurance gap that undermines investor decision-making and enables greenwashing. This study addresses the absence of a validated audit framework specifically designed for Scope 3 supply chain disclosures by developing and testing a triangulated audit model that integrates data-source verification, methodological coherence assessment, and greenwashing detection. Drawing on a sample of 1,247 firm-year observations from CDP Climate Change respondents (2018–2024), we validate the framework through comparative analysis against traditional limited-assurance approaches. Results demonstrate that the triangulated framework achieves 89.4% detection accuracy for material misstatement, outperforming conventional verification methods by 23.7 percentage points. The framework's three components—supplier data lineage tracing, GHG Protocol alignment scoring, and greenwashing risk indexing—collectively explain 78.2% of variance in assurance outcomes. Findings indicate that firms with weak governance characteristics exhibit significantly higher greenwashing probability (β = 0.412, p < 0.001), confirming assurance exploitation risks. The study contributes a replicable, audit-ready framework that extends beyond financial materiality to incorporate impact materiality, offering practical guidance for auditors, standard setters, and capital market participants navigating fragmented global disclosure regimes.

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