Trax to Prepare Pharma Companies for California Climate Reporting Regulations


A recent McKinsey report revealed an “analysis of approximately 40 pharmaceutical companies shows that about 75 percent of emissions across the value chain are Scope 3, with 50 percent of the total emissions coming from upstream, specifically the purchased goods and services category.” Trax Technologies (Trax), the global leader in Transportation Spend Management (TSM) solutions, gives pharmaceutical companies a competitive advantage for climate reporting – both nationally and internationally. Trax is now focused on enterprises impacted by upcoming California climate reporting legislation.

Trax has been preparing enterprise shippers and pharma manufacturers to optimize their carbon footprint and for compliance with current and upcoming reporting requirement changes, including:

  • European Commission’s Corporate Sustainability Reporting Directive (CSRD);
  • International Sustainability Standard Board (ISSB) climate-related disclosures;
  • Securities and Exchange Commission (SEC) climate-related disclosures.

“At Trax, we’ve specifically been preparing our shippers for SEC Climate reporting regulations, which have been pushed back. However, these preparations give pharma companies impacted by the upcoming Climate Corporate Data Accountability Act in California a head start to what is considered to some supply chain leaders as an already arduous challenge,” said Steve Beda, Executive Vice President of Customer Success, Trax.

In California, the Climate Corporate Data Accountability Act (CCDAA) and the Climate-Related Financial Risk Act (CRFRA) require companies with revenues of $500M to report Scope 1 and 2 emissions in 2026 and Scope 3 emissions in 2027.

The CCDAA, which is unique in the U.S., bases its requirements on a preexisting standard that was recently adopted by the European Union for the CSRD in July – EN 16258. This standard for calculating and reporting GHG emissions from transportation encourages the industry to use general principles, definitions, system boundary descriptions, calculation methods, and data recommendations.

“Let’s say you have 20 transportation vendors in your supply chain, and you ask them each to provide you with their CO2 emissions data. Their respective reports won’t be consistent because these vendors come in all shapes and sizes, so you will receive 20 different versions of how they calculated their individual data,” said Beda. “There is a proven method to add up emissions – it’s EN 16258, the standard being used for the upcoming California climate reporting, which is the basis for Trax’s reports. There are numerous factors that are required – like vehicle type, fuel type, and distance – but it’s what we use at Trax, so we look forward to preparing more companies to comply under these standards.”

Trax is uniquely positioned to assist global enterprises, including pharmaceutical companies, as they work to meet the upcoming emissions reduction and reporting challenges. With Trax’s Carbon Emissions Manager, pharma companies can accurately assess their carbon footprint by collecting and analyzing reliable data from each leg and vendor within their supply chain. As a result companies can implement sustainable practices that benefit their operations, customers, and the environment.