Key Takeaways:
- The greenhouse gas emissions your business controls directly are likely only a fraction of your total carbon footprint; understanding where the rest comes from is the first step toward meaningful reduction.
- Scope 3 emissions span a wide range of business activities, from raw material sourcing to how customers use and dispose of your product, and each stage represents both a challenge and an opportunity.
- Engaging suppliers directly through structured programs is one of the most powerful levers available to companies looking to reduce Scope 3 emissions.
- Logistics optimization has the potential to simultaneously align sustainability improvements with operational efficiency gains.
- Circularity strategies, even when implemented incrementally, can help reduce emissions at multiple points across the value chain, from procurement choices to end-of-life product design.
Did you know that the carbon emissions for which your business is directly responsible represent just a small portion of your overall carbon footprint?
Today, most companies rely on a long and complex supply chain to guide their product through its lifecycle. Depending on the size of your company and the complexity of your product, this could include hundreds of steps and dozens of third parties, all cooperating to get your product into your customer’s hands, and disposing of it at the end of its life.
Every stage of this long journey generates greenhouse gas emissions, and mitigating them is a key opportunity for many companies looking to reduce their carbon footprint.
What is my supply chain’s carbon footprint?
Your supply chain’s carbon footprint is the greenhouse gas (GHG) emissions produced during phases of your product’s or service’s lifecycle that are outside your company’s direct control.
These emissions are also known as Scope 3 GHG emissions, and are still considered part of a company’s overall carbon footprint because they are a consequence of that company doing business.
One thing to note: You may see and hear “supply chain” and “value chain” used interchangeably, but there are some distinctions. “Supply chain” refers to upstream activities, such as manufacturing, transportation, and distribution of purchased goods. “Value chain” includes the supply chain, and also encompasses downstream activities including distribution of products to customers, and product use and disposal.
Common examples of supply- or value chain-related sources of carbon emissions can include:
- Energy consumption during the sourcing of materials used to manufacture the product (e.g., from activities such as mining, logging, farming, etc.)
- Energy consumption associated with manufacturing and production of any other goods brought into your company, used to conduct business or make and sell the product (such as packaging)
- Fuel consumption during transportation and other logistics (such as storage)
- Energy consumption during the use of the product or service.
- Energy consumption and process emissions during the disposal of the product or service. This can include ongoing emissions created by landfills, depending on the method of disposal and waste treatment.
Learn more in our webinar recap: Engaging Supply Chain on Scope 3 for Strategic Advantage
How supply chain management can help reduce your carbon footprint
Although Scope 3 emissions can be notoriously difficult to fully measure, there are still plenty of actions you can take right now to reduce your supply chain’s carbon emissions.
Collaborate with suppliers through supply chain engagement
Emissions embedded in purchased goods typically represent a company’s largest source of Scope 3 emissions. As a trusted business partner and client, chances are your company has a good working relationship with many of your supply chain partners.
Energy use, carbon footprint, or other information can be requested from suppliers using supply chain engagement programs. Quantifying your suppliers’ product-level footprints is an important first step to measuring progress on your own Scope 3 emissions.
Several different programs exist that companies like yours can use:
- The CDP Supply Chain initiative, which provides a questionnaire on carbon emissions to your suppliers at your request.
- The Supplier Ethical Data Exchange, which offers member companies a database to store, share, and report information on their supply chain.
- The Global Reporting Initiative, which collects the most widely used standards for sustainability reporting, provides examples of relevant information and data to collect from suppliers.
By using programs like these, you can collect emission data from your suppliers and start to better understand their carbon footprints. Gathering this data helps you calculate your own supply chain emissions more precisely and helps identify opportunities for mitigation. The more data you collect, the more of these opportunities you can discover, and the more impactful your next steps will be.
As you build this relationship, consider offering suppliers training, tools, and other support toward improving their own carbon footprints.
Introducing collaborative strategies like joint training workshops can be a win-win for you and your suppliers. Together, you can proactively identify opportunities to lower both of your carbon footprints and mutually benefit from the improvements. You might also, for example, pass along information on how to reduce energy consumption or procure renewable electricity. The more steps each of your suppliers take to reduce their carbon footprint, the more you’ll lower your own Scope 3 emissions.
Optimize logistics
Transportation and other logistics activities are a common source of a company’s Scope 3 emissions. Remember that all forms of transportation and storage are considered part of these emissions. Looking for ways to minimize logistical fuel consumption can lower your carbon footprint and help you optimize your supply chain at the same time.
For example, audit the types of vehicles you and your partners are using to transport your products. Is there an opportunity to upgrade to an electrical or hybrid alternative? You might also reassess your route planning to minimize travel distances or consolidate shipments to make fewer trips altogether. Even a few miles saved will add up to fewer emissions per year, especially for large operations.
Implement circularity and emphasize good recycling practices
McKinsey defines circularity as “practices that optimize resource use and minimize waste across the entire productive and consumption cycle, emphasizing sustainability and economic efficiency.” By reducing waste and promoting reuse, circularity helps reduce emissions in both the downstream and upstream sections of the value chain.
Optimizing your supply or value chain for circularity from end to end will be a long-term project, but you can start with a few small steps. You might be surprised how impactful even small changes to your supply chain can be. For example, choosing products (e.g., packaging) made with recycled materials could reduce your emissions without significantly inconveniencing your operation. Designing products for reusability and recyclability can help reduce end-of-life treatment emissions.
Strengthening Your Supply Chain to Reduce Carbon Emissions
Reducing supply chain emissions is about measurement and engagement. The most effective Scope 3 strategies involve collaboration across your value chain, from raw material sourcing to product end-of-life.
At Antea Group, we help organizations move beyond basic reporting to actively engage suppliers, strengthen value chain relationships, and identify practical opportunities to reduce emissions while improving operational performance.
If you’re ready to take a more strategic approach to Scope 3 emissions and value chain sustainability, connect with our team to explore how supply chain engagement can help reduce your carbon footprint while strengthening your business.
