Too Complex to Control? How Firms Navigate Scope 3 Governance Under Institutional Uncertainty

ABSTRACT As Scope 3 emissions make up the largest share of many firms' carbon footprints, firms face growing pressure to manage emissions beyond their direct control. Ongoing revisions of the CSRD, the GHG Protocol, and the SBTi Net‐Zero Standard further increase regulatory and methodological uncertainty. Drawing on 30 interviews with German Scope 3–intensive firms and 10 expert interviews, we examine how firms operationalize Scope 3 emissions and what explains the heterogeneity in their governance approaches under comparable institutional uncertainty. Firms do not converge on a single governance approach. Instead, organizational capabilities mediate how institutional uncertainty is interpreted, giving rise to three distinct response archetypes: Wait & React, Improve, and Explore. The archetypes differ in capability maturity and governance integration. Across archetypes, a key tension persists: expanding reporting, auditing, and target‐setting absorb resources, whereas decarbonization impacts remain uncertain. We therefore frame Scope 3 less as a precise control metric and more as a value‐chain steering tool that helps firms to identify emission hotspots and coordinate across their supply chains.