June 23, 2023 | Supply Chain Strategy
For supply chain leaders, ensuring that their organization has an external focus on scope 3 emissions from the supply chain ecosystem is key to making the most impact and not falling behind on their journey to net-zero emissions.
Yet, only 25% of organizations are making reducing supply chain emissions a top environmental priority, according to a survey of senior supply management executives by North Carolina State University (NCSU) and GEP.
Recycling, waste reduction, plastic reduction and reducing scope 1 and scope 2 carbon emissions topped the list, followed by scope 3 emissions .
Even though scope 3 makes up 70-90% of a company’s total emissions, companies are not focusing on working with their suppliers and partners to drive progress toward sustainability targets.
First, companies have greater control in managing scope 1 and scope 2 emissions. Because they must rely on data from suppliers and partners, they have more difficulty monitoring scope 3.
To overcome the challenges associated with scope 3 emissions, supply chain leaders should be examining and investing in technology. Having a unified technological ecosystem that can aid in collecting, cleansing, normalizing and analyzing data is vital. Some valuable steps leaders can take include:
Implementing advanced supply chain software powered by artificial intelligence (AI) enables organizations to gain real-time visibility into their supply chain and monitor scope 3 emissions. These tools can analyze vast amounts of data, identify emission hotspots, provide actionable insights and integrate spend data with ESG goals to identify opportunities.
Organizations should utilize technology to foster collaboration with suppliers and partners. Implement supplier collaboration platforms that enable data sharing, communication and joint initiatives for reducing emissions. By facilitating deeper partnerships, organizations can align sustainability goals, drive progress together and find opportunities for co-innovation.
Work closely with suppliers and partners to define standardized data requirements for emissions reporting. Clear guidelines will ensure consistent and accurate data collection, enabling better visibility and analysis. Integrating supplier data monitoring systems to capture real-time emissions data allows organizations to track performance, identify deviations and take corrective actions.
By adopting AI-powered supply chain software and fostering collaboration with suppliers and partners, organizations can gain real-time visibility into their supply chain and start taking actionable steps toward sustainability goals.
Establishing clear data requirements and targets, along with integrating supplier data monitoring systems, enables organizations to track performance and make timely corrective actions. To stay ahead in the journey to net-zero, supply chain leaders must embrace technology as a powerful tool to drive scope 3 reductions and achieve their environmental, social, and governance (ESG) objectives.
To learn more about the NCSU survey results, download the full report, Driving Supply Chain Sustainability in the Face of Disruptions and Cost Pressures, available on our Knowledge Bank.