Supply Chain

How to take Scope 3 Emissions from Data to Action

For Scope 3 to be monitored successfully, Scope 1 and 2 emissions reporting must be mandated across all businesses and suppliers, no matter their size.

Brand Provided | By Deborah Johnson | Published 1 month ago | About a 5 minute read

Image: Gerd Altmann

Scope 3 inventories have become an essential tool for organisations that are looking to take meaningful action to improve the environmental impact of their business. It can sometimes feel that sustainability efforts are a drop in the ocean; however, prioritising sustainability shows the wider business landscape a commitment to being both ethical and values-led. As more companies — with those in the IT Channel no exception — get further into their sustainability journeys, making more ethical choices and aligning on who they partner with is a key point of focus.

With Scope 3 emissions accounting for over 80 percent of the average carbon footprint of a business, managing external emissions can be notoriously difficult and overwhelming; and the value of an inventory is only as good as the data used to create it. It is therefore vital to collaborate with diverse suppliers and keep track of the varied data that will help hit the company’s sustainability goals. In 2023, an estimated 53 percent companies were tracking at least some of their scope 3 emissions.

Tracking value chain emissions

Scope 3 emissions data are collected differently and with more difficulty than scope 1 and 2. Scope 1 and 2 emissions cover the internal and external CO2 excretion of a single organisation, whereas Scope 3 emissions tracking factors the impact of its suppliers on the environment.

By tracking each scope, the monitoring of emissions data suddenly becomes an incredibly complex and time-consuming process hinged on the validity of each supplier’s data. This complexity creates barriers for suppliers, with an estimated 59 percent of suppliers not logging Scope 3 emissions data in 2023. For larger organisations, logging Scope 1 and 2 emissions can sometimes be a legal requirement — however, for Scope 3 to be monitored successfully, Scope 1 and 2 emissions reporting must be mandated across all businesses and suppliers, no matter their size.

To understand Scope 3 emissions, an organisation must collate and track each dataset provided from the third parties involved in their daily business operation. Naturally, this process differs for each business; and depending on the resources available, the level of detail that can be provided will vary and may not align with the Channel organisation’s current goals. This is where process mapping, which can serve as a checklist for the data requests, can be issued to stakeholders. Once all the data is received, then Scope 3 inventory can be calculated.

The challenges

There are significant roadblocks faced by businesses when collecting and analysing data for Scope 3 reporting. The validity of the datasets provided by suppliers can be difficult to verify. Furthermore, datasets can require expert analysis and organisation — all of which come at a cost. While some organisations are implementing AI to simplify these issues, their validity is still called into question.

Many suppliers do not have the time or resources to measure their own emissions data, let alone source or calculate these numbers for partners — so, Scope 3 tracking can fall by the wayside.

Emissions data is sensitive; as such, businesses are likely to be unwilling to share datasets or process maps either publicly or with partners. Datasets also require significant time to obtain and analyse. If a supplier isn’t undertaking this task or implementing it into their daily operations then a great deal of uncertainty and additional administration, to ensure that these numbers are correct and obtained timely, occurs.

There is also an issue when considering data validity. Having emissions data that suggests a company is a high pollutant is undesirable across the industry, with many suppliers aware of this. However, combatting this can take a great deal of time, money and expertise that many businesses find inaccessible. Consumers are not only becoming more aware of the sustainability impact of the products and services they use — many are also educating themselves to interpret the validity of claims made by organisations, with 70 percent of consumers now attuned to greenwashing in their purchase process.

Collaboration is key

Further pressure is placed on Channel suppliers to track emissions and stay conscious about implementing renewable and sustainable operations. These efforts are almost doubled when pressure is applied on suppliers by purchasers. The power that purchasers have and their influence can persuade suppliers to reduce their emissions and hit their Scope 1 and 2 targets.

Tracking Scope 3 emissions is a difficult and tedious process for organisations. Cross-business collaboration can also be a tricky area to navigate and thus further slows this process down. By championing collaboration, the process with other businesses becomes easier.

From data to action

In 2021, only 12 percent of businesses saw sustainability as a main priority. However, Agilitas’ 2024 Channel Trends report found that 41 percent of the Channel now feel that sustainability will be one of the most impactful trends for industry in the next 12 months.

A key network of businesses and suppliers are established when Scope 3 emissions are tracked. For a single business, dozens of suppliers are likely to be engaged across their operations; as such, each of their direct emissions data or process maps must be examined. When engaging these businesses, organisations concerned with their Scope 3 emissions are likely to only engage with suppliers also concerned with their emissions data or work with current suppliers to implement the resources needed to do so.

With customers more likely to purchase from a company with sustainability targets, it is no wonder many in the Channel are now focusing on tracking Scope 3 emissions. Regardless of the company’s intent, a positive environmental result is still seen — with organisations across the Channel focusing on their and their suppliers' direct emissions ahead of internal and government targets.