The demand for sustainable business practices has never been greater and companies are no longer judged solely on their financial performance but also on their environmental footprint. Among the most significant contributors to a company’s carbon footprint are its supply chain emissions, particularly those categorised under Scope 3 emissions. Decarbonising these emissions is a crucial step towards achieving corporate sustainability goals (CSG).
Understanding Scope 1, Scope 2, and Scope 3 Emissions
Before diving into strategies, it’s important to understand the different types of emissions:
- Scope 1 Emissions: These are direct greenhouse gas (GHG) emissions from sources owned or controlled by your company. This includes emissions from company vehicles, on-site fuel combustion, and any other direct industrial processes.
- Scope 2 Emissions: These are indirect emissions from the generation of purchased electricity, steam, heating, and cooling consumed by your company. Although these emissions are a consequence of your activities, they occur at sources not owned or controlled by your company.
- Scope 3 Emissions: These are all other indirect emissions that occur in your value chain. This includes emissions from purchased goods and services, business travel, waste disposal, your employees commute and use of sold products. Scope 3 emissions often account for the largest portion of a company’s carbon footprint, making them a critical focus for decarbonisation efforts.
Step-by-Step Guide to Decarbonising Your Supply Chain
Decarbonising a supply chain can seem daunting, but by breaking it down into manageable steps, you can effectively reduce your Scope 3 emissions and create a more sustainable business model.
1. Measure Your Baseline Emissions
Before you can reduce your emissions, you need to know what you’re working with. Start by measuring your Scope 1, 2, and 3 emissions. This will give you a baseline to work from and help identify the biggest sources of emissions within your supply chain.
- Tools and Standards: Utilize ISO 14064-1:2018 for GHG quantification and reporting. The GHG Protocol Corporate Standard is another valuable tool for tracking and categorising your emissions.
2. Engage Your Suppliers
Suppliers play a crucial role in your Scope 3 emissions. Work closely with them to assess their carbon footprints and encourage them to adopt sustainable practices. Collaborating with suppliers to reduce emissions can lead to significant reductions across the entire supply chain.
- Supplier Assessment: Use the ISO 20400:2017 Sustainable Procurement standard to ensure that your suppliers meet environmental criteria.
3. Set Science-Based Targets
Once you have a clear picture of your emissions and have engaged your suppliers, set ambitious but achievable reduction targets. Science-based targets (SBTs) ensure that your goals align with the latest climate science, helping to limit global warming to 1.5°C.
- Frameworks: Consider following the Science Based Targets initiative (SBTi) guidelines, which provide a clear pathway to setting and achieving your decarbonisation goals.
4. Implement Reduction Strategies
With targets in place, it’s time to take action. Strategies for reducing Scope 3 emissions can vary widely depending on your industry, but some common approaches include:
- Energy Efficiency: Encourage suppliers to improve energy efficiency in their operations.
- Sustainable Materials: Source materials that have lower embodied carbon or are sustainably produced.
- Transportation: Optimise your organisations logistics and transportation to reduce emissions, such as by switching to low-carbon transport options.
- Circular Economy: Implement circular economy principles to reduce waste and promote recycling.
5. Monitor and Report Progress
Regularly monitor your progress towards your targets and report on it transparently. This not only helps you stay on track but also builds trust with stakeholders, including customers, investors, and regulators.
- Reporting Standards: ISO 14064-1:2018 is also relevant here for reporting progress. Additionally, the GRI Standards provide guidance on disclosing environmental impacts.
6. Innovate and Invest
Innovation is key to long-term decarbonisation. Invest in new technologies, such as renewable energy, carbon capture, and storage solutions, and low-carbon product innovations. Such investments not only reduce emissions but can also lead to cost savings and new business opportunities.
The Benefits of Decarbonising Your Supply Chain
Investing in decarbonising your supply chain offers numerous benefits, including:
- Enhanced Reputation: Companies leading in sustainability are viewed more favourably by consumers and investors, enhancing brand loyalty and market position.
- Regulatory Compliance: As governments tighten regulations on carbon emissions, having a decarbonised supply chain ensures compliance and avoids potential fines or sanctions.
- Cost Savings: Energy efficiency and waste reduction can lead to significant cost savings. Additionally, sustainable practices often lead to more efficient operations overall.
- Resilience and Innovation: Decarbonisation encourages innovation, making your company more resilient to market changes and future-proofing it against environmental and regulatory risks.
Testimonials and Quotations
Many global organisations have already embarked on the journey to decarbonise their supply chains, and their success stories can inspire and guide your efforts.
“Our commitment to achieving net-zero emissions across our value chain by 2050 has driven us to closely collaborate with our suppliers and innovate across our operations. The journey has not only reduced our environmental impact but also opened new avenues for growth.”
— Paul Polman, Former CEO, Unilever
“Decarbonising our supply chain was a daunting task, but by setting clear targets and engaging our suppliers, we’ve made significant progress. The benefits are clear: a more sustainable business, reduced costs, and a stronger brand reputation.”
— Mary Barra, CEO, General Motors
Relevant ISO Standards for Decarbonising Supply Chains
As you undertake the process of decarbonising your supply chain, several ISO standards can provide valuable frameworks and guidelines:
- ISO 14064-1:2018: Greenhouse gases — Part 1: Specification with guidance at the organisation level for quantification and reporting of greenhouse gas emissions and removals.
- ISO 20400:2017: Sustainable Procurement — Guidance on integrating sustainability into procurement processes.
- ISO 14001:2015: Environmental Management Systems — Requirements with guidance for use, which helps in creating an overall environmental management framework.
The road to decarbonisation might be challenging, but with the right strategies and a commitment to sustainability, it is not only achievable but also profitable. As global leaders in business have shown, the rewards of decarbonising your supply chain go beyond compliance—they are about securing your company’s future in a world that increasingly values sustainability.
How EcoVerify can help?
If you’re striving to meet your organisation’s sustainability goals, partnering with a trusted expert can make all the difference. EcoVerify is here to help. As Ireland’s leading provider of sustainability assurance and carbon footprint verification, validation and training services, we are dedicated to supporting you every step of the way.
At EcoVerify, we understand the challenges you face in navigating complex regulations and ensuring the credibility of your environmental claims. Whether you’re just starting your sustainability journey or looking to solidify your leadership in the field, our expertise in verifying and validating greenhouse gas (GHG) emissions, carbon neutrality, and net zero claims will give you the confidence that your efforts are both genuine and impactful.
Our EcoVerify Academy of Sustainability offers tailored training programs that will equip you and your team with the knowledge and skills needed to excel in GHG management and sustainability reporting. With our support, you can confidently achieve your goals and demonstrate your commitment to a sustainable future.
Let us be your partner in this journey. Contact us today at [email protected] to learn how EcoVerify can help you reach and showcase your sustainability milestones. Together, we can empower a more sustainable future.
