The following are some options for accelerating action via your supply chain and reduce scope 3 emissions. A company’s impact on the environment goes much beyond the scope of its immediate operations. Businesses and governments have a responsibility to help decrease glasshouse gas emissions (GHG) from their supply chains because of the amount of items and services they acquire. Scope 3 emissions refer to these emissions. Important players in the global economy need to take a deep, system-wide strategy to limit warming to 1.5 degrees Celsius, as was discussed at COP26 and in the most recent report from the Intergovernmental Panel on Climate Change (IPCC).
When it comes to lowering Scope 3 emissions and getting suppliers to adopt environmental ambition, there are four key activities that major buyers are doing. Although this seems like a formidable obstacle, four main steps are being adopted by major buyers to overcome it.
Make Smart Purchases That Will Help Spread Transparency
The average multinational corporation’s direct, operational emissions are around 11.40 times bigger than its upstream Scope 3 emissions. How can consumers gauge and manage this influence?
The first and most crucial action is a call for environmental openness. Companies like Ford Motor Company, who are among the world’s most powerful purchasers, are pressuring their most significant suppliers to provide data on glasshouse gas emissions, environmental problems, and corporate governance. By talking about gathering and sharing impacts, buyers may make the supply chain more open and increase their control over their Scope 3 footprint.
Environmental data requests are becoming standard operating procedure for companies of all stripes. In 2021, the CDP Supply Chain served requests for environmental data from over 2,400,000 significant suppliers to over 200 clients with a combined buying power of US$5.5 trillion.
It Is Important To Set Specific Goals and Strategically Include Your Suppliers
To achieve a true reduction in upstream Scope 3 emissions, businesses must go beyond data collection and create explicit expectations for their suppliers on the reduction of emissions. By working with CDP Supply Chain members, for instance, suppliers were able to reduce glasshouse gas emissions by 619 million metric tons in 2020 alone. This is equivalent to permanently shutting off the power at 159 coal power plants.
Your Supply Chain Has To Be In Sync with Research-Based Goals
To achieve our overarching goal of keeping global warming to well below 1.5 degrees Celsius, we need to set reduction targets for carbon emissions that are backed up by scientific research, the gold standard for the setting of ambitious objectives. This is not lost on CDP Supply Chain participants; in fact, more than half of them have already set an SBT to reduce emissions based on scientific evidence. Unfortunately, only 2.5% of 2021 providers who shared rates also had SBTs in place.
Conclusion
The way it operates is a perfect illustration of cascading SBTs across the company’s supply chain. To achieve its own Scope 3 SBT, works with CDP Supply Chain, and one of the criteria is that 60% of its suppliers, as defined by the amount spent on purchased goods and services and capital items, have their own SBTs by the end of 2025.
