A unique position
Why procurement should be the driving force behind Scope 3 reduction
By Vishal Patel
Achieving net zero goals has long been a critical agenda item for CEOs and boards . However , while Scope 1 and 2 emissions have been a standard sustainability KPI for some time , Scope 3 emissions remain the missing piece in the net zero puzzle .
Scope 3 emissions are indirect greenhouse gas ( GHG ) emissions from an organization ’ s value chain . They are calculated from emissions originating outside of the company but among their supply chain , such as purchased goods and services , waste disposal , capital goods , and logistics . It ’ s not enough to just think about reducing emissions from an organization ’ s four walls anymore – it ’ s time to start thinking about a global shift towards a low-carbon economy .
Understanding , managing , and reducing Scope 3 emissions is essential to any net zero strategy . Procurement teams are uniquely positioned to bring visibility on emissions across the entire supply chain and help establish critical data flows that are vital for reporting and transparency . Here ’ s why procurement has a crucial role to play in turning net zero dreams into a reality .
It ’ s not as easy as 1 , 2 , 3 …
Scope 3 emissions are the largest source of GHG emissions , accounting for 75 percent of an organization ’ s total emissions . To complicate things further , Scope 3 emissions for one organization are the Scope 1 and 2 emissions of another organization . This makes the route to net zero far from clear .
With organizations ’ reputations and market value at stake , turning efforts to cutting emissions is critical . A third of the UK ’ s biggest companies have made bold claims to achieve net zero plans by 2050 , including AstraZeneca , Sainsbury ’ s , and BT Group , which is also mounting the pressure on other firms to prioritize sustainability .
While tackling Scope 3 emissions is a critical part of the fight against climate change , it ’ s also a business priority as organizations navigate a complex web of legal and regulatory requirements for reporting and disclosing Scope 3 emissions . Upcoming regulations such as the FCA ’ s Sustainability Disclosure Requirements in the finance industry – which will make reporting on Scope 3 emissions compulsory
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