Supply Chain

Scope 3:
The Serious Path Towards Sustainability

More and more companies are making public commitments to cut greenhouse gas emissions outside of their own operations. Why? Because compared to scope 1 and 2 emissions (from direct activities), avoiding scope 3 emissions can have the greatest impact on a corporate footprint. The numbers are clear: The majority of GHG emissions come from indirect activities, both upstream and downstream, in the supply chain. In fact, for most of consumer goods products manufacturing, scope 3 emissions account for over 70 percent of overall GHG emissions. Included is everything from purchasing raw materials to end of life treatment.

By Daniel Hill | Published 8 years ago | About a 3 minute read

The numbers are clear: The majority of GHG emissions come from indirect activities, both upstream and downstream, in the supply chain. In fact, for most of consumer goods products manufacturing, scope 3 emissions account for over 70 percent of overall GHG emissions. Included is everything from purchasing raw materials to end of life treatment.

So, how one approaches setting supply chain goals is important:

Before anything can be set, the proper stakeholders must be looped into the process. Understanding of how a company’s supply chain works will dictate what data needs to be collected, and from which suppliers;
The goal also has to be achievable, and set specifically to a company’s own GHG footprint;
A system must in place to credibly measure and report on both the environmental and business impacts;
The target should be based in science.

This last point is incredibly important, because setting science-based supply chain targets has officially become mainstream: Since 2015, when Walmart surpassed its 20-million-metric-ton GHG-avoidance goal, and the Science-Based Target Initiative was launched at COP21 in Paris, over 250 companies (including some of the Fortune 500’s largest) have committed to setting science-based scope 3 goals. Now Walmart’s pushing the envelope even further with its Project Gigaton initiative.

My point here? All this momentum, at such a huge scale, means that without science-based supply chain goals, your company’s sustainability plan will likely not be taken seriously. Not by your customers. Not by your shareholders. And not by your board members or employees.

Yes, navigating scope 3 can be daunting. There are a number of different methods — an absolute reduction goal versus an intensity goal — that take into account different scopes, have different benefits and are for different data needs. In other words, there are a lot of moving parts.

So, be taken seriously. The journey toward sustainable supply chains may contain unexpected twists and turns, but in the end, it will be well worth it … for both your business and the planet.