Devin O’Herron offers three steps for tackling Scope 3 emissions in the supply chain  

When addressing greenhouse gas (GHG) emissions, manufacturers face a unique challenge: over 70 percent of a company’s carbon footprint is found in their supply chain. Despite difficulties in collecting this data from third parties, the pressure to understand and reduce emissions is growing. Customers, investors, and company employees are all demanding action, and businesses can’t afford to wait.  

A roadmap to emissions data

To meet stakeholder expectations, companies need to take a proactive, collaborative approach. Where does this start? With a clear baseline of emissions data. After all, manufacturers can’t manage what they’re not measuring. 

Manufacturers should encourage every supplier in their supply chain to begin the process of quantifying their emissions. These efforts should align with globally accepted best practices, such as the Greenhouse Gas Protocol. 

Collecting this data will be more difficult than relying on estimates, but new requirements are making it an absolute necessity. New regulations, such as the Carbon Border Adjustment Mechanism and the EU Batteries Regulation, are adding pressure and requirements for manufacturers to start working directly with their suppliers today to get accurate, verifiable data. 

Step one: taking inventory  

Manufacturers should begin by determining which suppliers and products are responsible for the most emissions (Scope 3). Rather than blanketing their entire supply chain with requests, manufacturers should request data from these organizations first.  

Step two: engaging suppliers  

The biggest hurdle manufacturers will face in getting an accurate representation of their Scope 3 emissions is access. Many suppliers lack the background knowledge needed to meet requests for this data. 

It can be helpful to group suppliers by maturity. Some may already be tracking emissions data, whereas others may just be getting started, and many will not have any data. For suppliers with lower maturity at tracking emissions data, manufacturers can consider providing them with training. Some companies even offer open ‘office hours’ where suppliers can learn how to calculate and share data, ask questions, and receive real-time support.  

It’s important to recognize that a company’s supplier relationships will ultimately determine the success or failure of their ability to track Scope 3 emissions. The process that manufacturers take to gather this data should not be focused on penalizing suppliers but engaging them as partners that are working together to achieve a mutually beneficial goal. 

Step three: taking action  

Once manufacturers have primary data, the next step is to understand its value in reducing emissions. Zero in on ‘hot spots’ in the supply chain – the areas in which parts or materials are responsible for the lion’s share of spend and emissions. This is where any decarbonization efforts on the part of manufacturers will have the most impact, likely dwarfing any in-house emissions. 

Next, determine what suppliers in these ‘hot spots’ are doing about their emissions. Do they have reduction strategies? Are these strategies enough to impact goals related to Scope 3 emissions? 

Manufacturers must continually collect this data to determine whether the overall footprint of these suppliers is decreasing over time. 

Hard truths 

Demand for Scope 3 emissions data has been around for some time. Manufacturers haven’t ignored the need for this data because it has been optional, but rather because it’s hard to collect. 

The reality is that, by definition, businesses have little visibility and control in this area. There will be challenges: suppliers will measure and report on emissions differently depending on their program maturity and the standards they follow. Some data requests will be ignored. Some numbers will rest on shaky assumptions. That’s the reality – and that is okay. The goal is progress, not perfection, and by doing the work now, manufacturers make Scope 3 emissions data less painful to collect in the long term. While challenges are inevitable, they can be used as learning moments and opportunities to improve programs over time. 

The good news  

Political winds may change, but the demand for accurate carbon data isn’t going anywhere. That means the work companies put in today will only grow more valuable over time as this information becomes the upfront cost of doing business. Additionally, in the process of collecting this data, manufacturers will likely uncover waste and inefficiencies. Relationships may also flourish when supplier collaboration is made a priority and executed effectively. 

The message: there’s no more room to wait. Any further delays in collecting Scope 3 data will quickly become expensive. Manufacturers should start today to secure the data, direction, and confidence needed to get ahead of tomorrow’s requirements.  
www.assent.com  

As a Senior Sustainability Expert at Assent, Devin O’Herron is a subject matter expert specializing in supply chain sustainability and responsible sourcing. Focused on providing guidance and expertise, Devin helps global manufacturers navigate emerging regulations, mitigate supply chain risks, and leverage sustainability principles to build meaningful programs that deliver bottom-line business value.