Where to Start with Scope 3 Emissions: Decarbonising the Supply Chain

Supplier Scope 1 & 2 Emissions: A Window to Scope 3

Many organisations today have mastered tracking Scope 1 and Scope 2 emissions. However, Scope 3 emissions management is a more challenging endeavour.

Addressing Scope 3 emissions (the indirect emissions from a company’s value chain) is essential for organisations aiming to achieve net-zero targets. These emissions usually make up 70% to 95% of all emissions and includes both supplier-related and customer-related activities Achilles Carbon Management Module and Carbon Reduce Programme are designed to assist organisations in identifying and reducing their suppliers’ Scope 1 and 2 emissions. This supports effectively managing their own Scope 3 emissions.

Understanding Scope 3 Emissions

Scope 3 emissions are categorised into 15 distinct areas, divided into upstream and downstream sources:

• Upstream sources:
  • Purchased goods and services
  • Capital goods
  • Fuel and energy related activities
  • Upstream transportation and distribution
  • Waste generated in operations
  • Business travel
  • Employee commuting
  • Upstream leased assets
• Downstream sources:
  • Downstream transportation and distribution
  • Processing of sold products
  • Use of sold products
  • End-of-life treatment of sold products
  • Downstream leased assets
  • Franchises
  • Investments

According to the Greenhouse Gas Protocol, these categories help organizations identify and manage emissions throughout their value chain.

Why is Scope 3 important?

Government regulations and industry standards are increasingly focusing on comprehensive emissions reporting. In the UK, suppliers who want to bid for major government contracts must follow the Procurement Policy Note (PPN) 06/21. This policy requires them to commit to achieving Net Zero by 2050 and publish a ‘Carbon Reduction Plan’. The Science Based Targets initiative (SBTi) also stresses the importance of including Scope 3 emissions in corporate climate goals. This inclusion is key to reaching global climate targets.

Industry-specific targets further highlights the importance of Scope 3 emissions. For instance, the UK water industry aims to achieve net-zero carbon emissions by 2030, necessitating a comprehensive approach that includes supply chain emissions. The Water UK Net Zero 2030 Routemap outlines strategies for reducing emissions across the sector, emphasizing the role of supply chain decarbonisation.

Rising expectations from stakeholders and stricter regulations mean businesses that proactively manage Scope 3 emissions gain a competitive advantage. In meeting sustainability standards, building trust, and reducing long-term risks businesses can lead the way to net-zero.

Where do I Start With Scope 3 Emissions?

Starting a Scope 3 emissions reduction journey can be complex. Following these steps provides a structured approach to begin managing emissions across your supply chain:

1. Consult Established Standards and Frameworks: Utilise resources such as the GHG Protocol and ISO 14064-1 for guidance on measuring and managing emissions.
   
2. Identify Relevant Emission Categories: Assess which of the 15 Scope 3 categories are important to your organisation. Not all categories will apply, so focus on those that significantly impact your carbon footprint.
   
3. Assemble a Project Team: For larger organisations, forming a dedicated team to oversee Scope 3 initiatives can facilitate effective management and implementation of emission reduction strategies.
   
4. Engage with Suppliers: Collaborate with suppliers to gather accurate data on their Scope 1 and 2 emissions. Collaboration is essential, as a significant portion of a company’s Scope 3 emissions originates from its supply chain. According to a report by CDP, supply chain emissions are on average 11.4 times higher than operational emissions.
   
5. Set Reduction Targets: Establish clear, science-based targets for reducing Scope 3 emissions. The SBTi provides methodologies for setting such targets, ensuring alignment with global climate goals.

These steps are a great starting point for Scope 3 emissions management. They will establish a solid foundation that aligns with both regulatory demands and sustainability goals.

Supporting Scope 3 Emissions Reduction

Effectively managing Scope 3 emissions is essential for organisations committed to sustainability and achieving net-zero targets. By focusing on reducing suppliers’ Scope 1 and 2 emissions, companies can make significant strides in decreasing their supply chain carbon footprint.

Achilles offers a structured approach to managing and reducing Scope 3 emissions. By focusing on suppliers’ Scope 1 and 2 emissions Achilles provides tools for data collection, verification, and reporting. This enables organisations to gain transparency into their supply chain emissions. By engaging suppliers and promoting best practices, Achilles assists companies in achieving their carbon reduction objectives and aligning with regulatory requirements.

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