Many companies in the Combient network have set ambitious Scope 3 climate targets - for example to cut supply chain related emissions by 50 % by 2030. As we turn the page towards the year 2023, the speed at which companies need to start acting for the change is accelerating.
To truly transform their value chains towards low carbon on time, companies need to make important decisions both regarding procurement and product portfolios in the next couple of years.
Working actively with suppliers and customers on Scope 3 emissions is still a learning process to the majority of companies. Many are addressing supply chain emissions e.g. through the Supplier Code of Conduct that is one-sidedly imposed towards suppliers. Nevertheless, not many companies necessarily have the (buying) power to influence their suppliers towards faster climate action. In the future, more active decisions on diverting purchases towards low carbon suppliers need to be made.
In the downstream, on the customer side, most emissions often come from the energy use of products. Developing the energy efficiency as well as alternatives for fossil fuel powered products are crucial in today’s operating environment.
Another tool for addressing the downstream Scope 3 emissions are circular business models: offering products-as-a-service or performance-based contracts usually automatically ensures that the products in use are used as efficiently as possible. This is because the incentive for efficiency stays at the producer of the product as the business goal is not to sell as many products as possible - but to help customers utilize the products’ added value as efficiently as possible.
How can companies then accelerate the Scope 3 related emission reduction work? Here’s our four recommendations for the new year:
Perfect data is not needed for starting Scope 3 work. You can’t fix what you can’t measure - but you can start Scope 3 work also with less granular data. Knowing your largest Scope 3 emission categories is enough to know where to start.
Get to know your value chain. Engage with the major suppliers and customers of your value chain, who represent your largest Scope 3 emission categories. What are their roadmaps for emission reduction and what could you do together to fast-forward the development?
Include the whole organization. Explore ways to develop your company’s internal capabilities for emission reduction work - from R&D to procurement, operations and sales. Without a holistic understanding of the company’s challenges and needed actions across the organization, the goals will not be reached.
Ensure sufficient resourcing. If you lack the resourcing or competences internally, utilize external help for both internal and external climate work. Internal capability development and co-innovation with suppliers and customers can be made more efficient and impactful with external support.