Key takeaway
For companies in the CDP Supply Chain pathway (suppliers to Walmart, Microsoft, L'Oreal, Tata, and other large buyers), Q7.26 to Q7.28 are the questions that justify being on the pathway. They ask you to allocate your Scope 1, 2, and 3 emissions to the specific customers who drove them. Done well, the response strengthens key customer relationships and unlocks Awareness and Management tier points. Done poorly, it signals that you cannot connect emissions data to the business, which is exactly what your customers are screening for.
What this cluster covers
| Question | What it asks |
|---|---|
| Q7.26 | Allocate emissions to your customers based on the goods or services sold to them in the reporting period |
| Q7.27 | What are the challenges in allocating emissions to specific customers, and how could those challenges be overcome? |
| Q7.28 | Do you plan to develop your capabilities to allocate emissions to customers in future reporting years? |
These questions appear only on the Supply Chain pathway. If you are on the Full Corporate pathway and not invited as a supplier, they are not displayed.
Q7.26, the allocation table
Q7.26 expects you to list each requesting customer and provide:
- The customer name (typically pre-populated based on who invited you)
- The product or service category sold to them
- Allocated Scope 1+2 emissions in tCO2e for the reporting year
- Allocated Scope 3 emissions where applicable
- The allocation methodology (revenue share, physical share, mass-based, energy-based)
- The percentage of your total emissions covered by the allocation
Mass-based and physical allocation score higher than revenue-based. CDP grades the methodology, not just the number.
Worked example
Allocation methodology, scoring quality. "We allocate emissions to customers using physical units (tonnes of finished product) where production data permits. For Customer A, we sold 12,400 tonnes of refined steel against total production of 240,000 tonnes (5.17 percent share). Our Scope 1+2 emissions for the reporting year are 480,000 tCO2e. Allocated Scope 1+2 to Customer A: 480,000 x 5.17 percent = 24,800 tCO2e. Where physical allocation is not feasible (services, multi-product orders), we fall back to revenue share, disclosed transparently in column 5."
A common error is using revenue share for everything because it is easier. Customers that have invested in their own Scope 3 inventory will recalculate using their own preferred method. If your numbers do not survive that recalculation, the relationship suffers regardless of your CDP score.
Q7.27, naming the challenges honestly
Q7.27 is a free-text question asking what makes customer allocation difficult. CDP graders expect a specific, candid answer. Generic hedging ("data is hard to get") scores at Disclosure only. Specifics score at Awareness.
Useful candor includes:
- Multi-customer batch production where physical allocation is approximate
- Service-based revenue where no obvious physical denominator exists
- Customers buying through distributors, with end-customer mix unknown
- Capacity-shared facilities where allocation depends on a chosen denominator
- Joint products and co-products from a single process
Pair each challenge with what would help. Common asks: customer-specific shipping data, batch-level energy meters, agreement on methodology with the customer, more granular ERP data. This signals you are working on the problem, which moves the answer from Disclosure to Awareness tier.
Q7.28, the future commitment
Q7.28 asks if you plan to develop allocation capability in future years. This is a Yes/No with a follow-up explanation.
The Leadership-tier signal is a phased plan with concrete milestones:
- Year 1: deploy meter-level energy data at the three plants representing 70 percent of customer A's volume
- Year 2: integrate with ERP to enable monthly customer-level allocation
- Year 3: third-party assurance over the customer-level allocation methodology
Generic answers like "we will explore options" score Disclosure only. Specific phased plans with named systems and timelines score at Management tier and feed Leadership.
Analogy
Think of customer allocation like splitting a restaurant bill at a large dinner. Splitting evenly (revenue share) is fast but unfair. Itemising what each person ordered (physical allocation) takes effort but produces the right number. Most groups split evenly and someone always over-pays. CDP rewards companies that do the itemising, both because the allocation is more accurate and because the discipline of itemising forces better operational data.
Why this cluster matters beyond the score
Customers in the Supply Chain programme increasingly use these allocations directly in their own Scope 3 inventory. A supplier that provides clean, methodologically defensible numbers is easier to keep on the supplier list. A supplier that returns generic estimates becomes a candidate for replacement when the customer is under pressure to improve its Category 1 (purchased goods and services) data quality.
For the underlying methodology behind allocation choices, see our GHG Scope 3 course and the Financed Emissions course for the parallel question facing financial institutions.
Common mistakes
- Selecting revenue allocation for every customer with no fallback rationale.
- Reporting allocated Scope 1+2 only, with no Scope 3 allocation, when the product carries embedded supply chain emissions.
- Using "data is hard to get" as the entire Q7.27 answer.
- Saying "Yes" to Q7.28 with no plan, milestones, or named systems.
- Allocating to customers but failing to ensure the sum across customers does not exceed your total inventory.