Five Actionable Steps for Decarbonizing Supply Chains

An organization’s supply chain offers immense opportunities when it comes to reducing carbon emissions. The World Economic Forum (WEF) report published last year lays out ways in which businesses can multiply their carbon impact through their value chains, in particular, where those supply chains involve industries and sectors in which tackling climate change may not be viewed as a top priority yet. 

Additionally, the WEF recommends firms work in collaboration with policymakers, regulators, their suppliers, to boost transparency, develop robust performance metrics, and set meaningful targets for addressing harmful supply chain carbon emissions. 

In this article, the greenhouse gas (GHG) emissions management experts at SINAI Technologies provide five actionable steps firms can take to successfully decarbonize their supply chains as well as defining supply chain emissions.

What are supply chain emissions?

‍

Supply chain emissions are within the GHG Protocol’s ‘Scope 3’ emissions category. Scope 3 comprises all indirect emissions generated by resources not controlled or owned by your company but that your company indirectly impacts through its value chain. 

For example, the use of your firm’s sold products, transportation and distribution of your product or service, waste produced during your operations, and your business travel impact are all considered scope 3 emissions. To see the full range of emission categories, take a look at the Technical Guidance for Calculating Scope 3 Emissions developed by the GHG Protocol.

Five steps towards decarbonizing your supply chain 

Deep decarbonization of your supply chain is possible, by taking action and following our five steps. From calculating a robust GHG emissions inventory and committing to a science-based emissions reduction target to reporting your impact publicly, your firm can target and reduce harmful Scope 3 emissions while moving closer to becoming a net-zero business.

Step 1: Calculate a robust GHG emissions inventory 

The first step your firm must take is to gain a complete picture of the volume of GHG emissions you produce, including through your entire value chain. 

Cutting-edge technology now makes it easier than ever before to track your firm’s Scope 1, Scope 2, and Scope 3 emissions while understanding your resource consumption by fuel type. With a robust and accurate calculation of your GHG emissions inventory,  you’ll be well on your decarbonization pathway with a solid and comprehensive foundation of emissions data. 

Step 2: Commit to a science-based target 

For firms that are serious about reaching net-zero and tackling climate change, setting and achieving a science-based emissions reduction target is the gold standard. 

By following the SBTi’s recommendations, you can ensure your firm is doing all it can to reduce harmful emissions from its value chain, backed by science. 

Reducing or eliminating key sources of emissions from your firm’s value chain mitigates the impact your firm has on the climate and the climate-related risks to which your firm is exposed. In addition, SINAI recommends a climate positive strategy for firms wanting to achieve net-zero business status, as this approach provides an opportunity for your firm to commit not only to closing the existing emissions gap but also to closing the climate finance gap.

Step 3: Engage the people who matter 

Your firm’s low carbon strategy is only as strong as the people who will help it come to fruition. That’s why the third step in successfully decarbonizing your supply chain is about creating and maintaining engagement with the people who matter. Your finance, operations, procurement, and R&D teams all need to play a part when it comes to tackling Scope 3 emissions. 

Beyond your internal stakeholders, fostering a dialog of sustainability with suppliers, customers, investors, and partners is key. The SBTi’s supplier engagement framework is a great place to start as your firm develops a value chain engagement strategy. 

Step 4: Empower your suppliers

With your suppliers engaged by following step 3, your firm now needs to empower them. By making it as easy as possible for your supply chain to gather and share emissions data, you can save valuable time and resources by collecting the right data the first time with minimal effort. 

SINAI’s solution allows you to bring all of your Scope 3 emissions data into one place, using sophisticated accounting tools that minimize gaps in primary data collection. Track and manage your firm’s value chain emissions through one easy-to-use and intuitive platform, empowering your suppliers to help you reach net-zero in the process.  

Step 5: Measure and report your impact 

The final step in successfully decarbonizing your firm’s supply chain comes down to meaningful measurement and reporting of your impact.  

Thankfully, the TCFD provides your firm with a common framework for assessing, managing, and disclosing the financial dimensions of climate-related risks and opportunities. If your firm has struggled in the past to operationalize the TCFD’s recommendations, you’re not alone. 

Enterprise cloud computing, like SINAI offers, provides an accelerated pathway to address these common challenges by simplifying complex data problems, generating dynamic insights, and fostering collaboration with all of your firm’s stakeholders, including key players in your value chain. 

Tackle Scope 3 emissions with ease 

If you’re ready to tackle Scope 3 emissions within your firm’s supply chain, reach out to SINAI today. We can provide a demo of our software, helping you understand just how transformative our decarbonization platform can be when it comes to reducing GHG emissions from your firm’s value chain.