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.
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.
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:
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.
Pulse has developed tools and technology to making it easier than ever to work with your suppliers to gain supply chain transparency.
Read our intro to Scope 1, 2 and 3 emissions