Reducing Supply Chain Emissions – Scope 3 Carbon Reduction
In recent years, organisations have been encouraged to pursue supply chain carbon emission reduction and plan to become net zero These pressures not only come from customers, employees, key stakeholders and governments but from other organisations too.
Supply chain, or Scope 3, emissions, account for a large proportion of overall emissions for an organisation. They have a considerable impact on the network of other businesses, facilities and activities involved in developing, manufacturing and delivering a product or service.
Tackling Scope 3 emissions and building a supply chain carbon reduction strategy presents an additional layer of complexity as it requires third parties to report on and share their own Scope 1 and 2 emissions. The multitude of sources, inconsistency in data and the absence of reporting from either upstream or downstream partners can create a snowball effect in your own carbon reporting. Click here for a full breakdown and explanation of your Scope 1, 2 and 3 emissions.
Supply Chain Decarbonisation
The Climate Change Committee has said there is insufficient progress and limited policies and plans associated with how supply chain risks are identified and managed.
However, supply chain decarbonisation is crucial when it comes to corporate climate action and reaching the national net zero targets.
So, how can companies start to make a difference in areas of business beyond their direct control?
Information and collaboration is key. Transparent reporting and working collaboratively with customers, supply networks and industry groups helps to gain a clear understanding of your supply chain emissions.
Scope 3 Reporting
There are increasing demands on businesses to report on Scope 3 emissions as standard in addition to Scopes 1 and 2. Putting a robust framework in place to manage the ongoing capture, tracking and reporting of these emissions is key, helping it become business as usual rather than a burden.
The importance of a Carbon Reduction Plan in a supply chain
Due to the UK Government’s introduction of the PPN 06/21, all suppliers to the public sector, including the NHS, must have a Carbon Reduction Plan in place.
Organisations that do not have a net zero target and a formal plan on how they will meet it, risk being excluded from the procurement process.
Discover how a Carbon Reduction Plan can support your organisation’s place in the supply chain.
How TEAM can help
Our Net Zero and Carbon Reduction Consultancy services help organisations to define, shape and monitor a carbon emissions strategy designed around their operational needs and challenges.
Our experienced carbon reduction consultants work with organisations across a range of industries to create and support the delivery of bespoke carbon reduction and net zero strategy plans.
Tailored services for your organisation
What are the benefits of supply chain emissions reduction?
- Identify peaks in emissions in your organisation and supply chain
- Better understand your organisation’s carbon emissions and opportunities to reduce them
- Ensure reporting is in line with acceptable industry practices and regulatory requirements
- Make operational cost savings through understanding your energy use
- Improve purchasing strategies and collaborate with suppliers to ensure supply chain resilience
- Differentiate your organisation from competitors by demonstrating best practice in carbon reduction and energy efficiency
- Demonstrate improved performance year on year by establishing ongoing monitoring of GHG emissions
- Build your organisation into a leader of sustainability, and become a more attractive investment to customers, stakeholders, and future employee talent
- Fulfil your customers’ requirements in proving your sustainability credentials
- Elevate your organisation’s reputation through your contribution to achieving zero carbon emissions, positive environmental change and investment in future generations
- Contribute to reducing environmental pollution, supporting the UK Government’s Net Zero 2050 target.
Meet our net zero experts
Our in-house, professional, energy consultants are the independent experts behind our net zero, emissions reporting and decarbonisation services. Each consultant has the breadth of skills, cross departmental expertise and sector experience to support your Scope 3 carbon reduction strategy.
Reducing Supply Chain Emissions FAQs
Scope 3 supply chain emissions refer to all indirect emissions that occur across a company’s value chain, excluding direct operational emissions (Scope 1) or those from electricity use (Scope 2). These emissions include those from suppliers, transportation, product use, and disposal, making them a critical focus area for reducing environmental impact.
Value chain emissions are often the largest portion of a company’s total carbon footprint, far surpassing direct emissions from operations. Addressing these emissions ensures that carbon reduction efforts encompass the entire lifecycle of a product or service, from sourcing to disposal. By reducing value chain emissions, companies can make a significant contribution to achieving sustainability targets.
There are several strategies for reducing supply chain emissions, such as working closely with suppliers to help them reduce their carbon footprints, optimising transportation and logistics for greater efficiency, shifting to sustainable materials, and investing in renewable energy. Implementing circular economy principles, such as recycling and reuse, can also help lower carbon emissions. TEAM Energy provides tailored advice on how to implement these strategies through its supply chain emissions consultation services.
Measuring supply chain carbon emissions requires gathering data from suppliers and other stakeholders across the value chain. Companies can use carbon accounting platforms and standards such as the Greenhouse Gas (GHG) Protocol to track emissions, especially Scope 3.
Suppliers play a vital role in reducing supply chain emissions, as much of the carbon footprint is linked to their activities. Encouraging suppliers to adopt energy-efficient practices, sustainable materials, and renewable energy can significantly reduce emissions. TEAM Energy helps businesses collaborate with their suppliers to reduce carbon across the value chain, providing consultation services to facilitate the transition to low-carbon operations.
Reducing supply chain carbon brings numerous benefits, including enhanced sustainability credentials, compliance with regulations, and improved market competitiveness. It can also lead to operational cost savings through energy and resource efficiency. Moreover, reducing emissions mitigates the risks associated with carbon pricing and environmental regulations.
Calculating Scope 3 supply chain emissions involves collecting data from across the value chain, including suppliers, transport, and product use. Many companies use a combination of industry averages and direct supplier data to estimate emissions. Tools like the GHG Protocol’s Scope 3 Evaluator can guide this process. TEAM Energy can provide expert guidance in calculating and managing Scope 3 emissions, helping businesses ensure compliance and meet sustainability goals.
Yes, switching to renewable energy can greatly reduce supply chain carbon emissions. Encouraging suppliers to adopt renewable energy sources or investing in renewable energy projects can lower the carbon footprint across the entire value chain.
Reducing Scope 3 supply chain emissions can be challenging due to the complexity of global supply chains, limited visibility into suppliers’ operations, and the potential cost of transitioning to more sustainable practices. Engaging suppliers and ensuring accurate data collection can also be difficult. However, these challenges can be overcome with proper collaboration and planning.
Not sure where to start?
Speak to a consultant on 01908 041543 to find out how we can help you start your Scope 3 reporting journey