As concerns about climate change continue to grow and become more urgent, businesses around the world are looking for ways to reduce their impact on the planet. However, many companies are still overlooking the impact of their own supply chain on the environment, which is where Scope 3 emissions are under scrutiny. 

If you’re wondering what on earth are Scope 3 emissions – you’re not alone. Scope 3 emissions are generated from all the activities that occur outside a company’s direct control. They are associated with its operations, including its supply chain. In other words, it’s the carbon footprint generated by everything that happens before a product reaches your company’s front door. 

Why focus on Scope 3 now? 

It is tempting to focus solely on reducing direct emissions (Scope 1) and emissions from purchased energy (Scope 2). This is a short-term solution that will become a regulatory headache in the long term. And organisations are only beginning to realise this.  

Under growing external pressures Boards and the C-Suite are gradually pushing Scope 3 closer to the top of their agenda. They are almost all in agreement that addressing Scope 3 emissions is essential to make a real impact on climate change. Indirect emissions are often the largest source of a company’s carbon footprint, and must not be ignored if your company is to have a more sustainable future. Although in the current uncertain and volatile climate with the war in Ukraine, urgent supply chain shortages and rising inflation there is a real danger that rising carbon emissions slip back down the corporate agenda.  

Why track suppliers’ emissions? 

The key for businesses seeking to address Scope 3 emissions is understanding their own supply chain. However, you can only measure what you can see. With complex, global supply chains with multiple tiers of suppliers, it can be difficult to identify and track emissions.  

It may surprise you that collaborating with the competition in your industry could be the answer.  

When businesses come to together to support their suppliers, they can develop a transparent supply chain across the industry. The knock-on effect for an industry is to: 

• Gather trusted data  
• Measure real data  
• Produce industry benchmarking reports  
• Standardise regulation 
• Influence real change 

Addressing your company’s Scope 3 emissions isn’t just good for the environment – it also benefits your business.  More efficient production processes lead to cost savings, and reducing exposure to political and climate-related risks. Plus, the added bonus of being universally recognised as a company that genuinely cares about the environment, actively taking steps to reduce your carbon footprint. There is nothing negative about good PR! 

Clearly, Scope 3 emissions matter, and they don’t have to be as confusing as they first appear. Pulse will assist your company to work closely with your suppliers and help to create a more sustainable future.  

Who doesn’t love teamwork aimed at saving the planet? 

Pulse has developed tools and technology to making it easier than ever to work with your suppliers to gain supply chain transparency. 

Book a demo today 

Read our intro to Scope 1, 2 and 3 emissions

Businesses that ignore ESG will not survive in the next decade.

This may sound like an unpopular opinion but read on to discover why ESG matters and the benefits of mastering ESG integration into your business.  

In recent years, there has been a growing recognition among organisations of the importance of Environmental, Social and Governance (ESG) factors in their operations and their ability to thrive in the next decade. Many other businesses are now catching up as they understand the long-term benefits. 

Why integrate ESG?

Companies that incorporate ESG considerations into their strategies and operations are better positioned to manage risk, build resilience, and create long-term value for stakeholders. 

This theme was unanimously supported at our recent ESG event and is summed up in the words of Andrew Morrison, Director, AM Bid:  

What’s driving ESG integration? 

The importance of ESG integration has been driven forward with the introduction of stricter regulations requiring companies to report on their ESG impact. For instance, European Union Regulation (SECR, CSRD, NFRD, TCFD, SEC, ISSB). Similar regulations are being introduced in other parts of the world, including the United States and Asia. This is having a knock-on effect along the global supply chain as businesses select who to work with based on ESG criteria not just pricing.  

How can companies assess ESG performance? 

To help companies assess their ESG performance and identify areas for improvement, ESG Maturity Assessments have emerged as a useful tool. A self-assessment process, the ESG Maturity Assessment helps companies estimate their ESG impact, identify areas of strength and weakness, and develop a plan to improve their sustainability performance.  

The process involves evaluating the company’s carbon emissions, waste, pollution, and human rights performance, among other factors. 

For larger companies, external ESG Maturity Assessments and Scoring have become normal business practice. ESG Ratings agencies and consultants can help with assessments, scoring, and the creation of a plan to improve a company’s ESG impact. Every company’s ESG Control Framework should include: 

• targets  
• policies  

• controls 
• reporting  

An ESG Maturity Assessment covers each of these elements of the Control Framework to measure its effectiveness, robustness, and goals. The assessment evaluates the sustainability targets within the overall business strategy, the quality of the internal control framework, the effectiveness of ESG Risk Register management, the quality of ESG management reporting, and the quality and transparency of ESG communications and internal reporting. 

How to gain a competitive advantage with ESG? 

Companies that adopt an ESG strategy early will gain a competitive advantage. Carrying out honest self-assessments of their ESG strengths and weaknesses is important to put an effective plan into action. While some ESG impacts may be complex and difficult to measure, acting early and starting the journey sooner rather than later will put companies on the path to a successful, sustainable future. 

In conclusion, ESG is an important aspect of modern business practice. Companies that incorporate ESG considerations into their strategies and operations are better positioned to manage risk, build resilience, and create long-term value for stakeholders.  

Join our ESG community today!  

For consultants visit www.pulsemarket.com/esg-for-consultants/  

For business visit www.pulsemarket.com/esg-for-business/