The Collaborative Advantage: Working Together to Tackle Scope 3 Emissions
The Collaborative Advantage: Working Together to Tackle Scope 3 Emissions
Scope 3 emissions are the elephant in the room when it comes to a company's carbon footprint. Unlike Scope 1 and 2 emissions - those directly controlled or managed by a company - Scope 3 emissions span the entire value chain and often account for 80-90% of a company’s carbon footprint. From the raw materials suppliers to the end consumer, these indirect emissions can be complex to measure, let alone mitigate and reduce.
But as the discussions at Climate Week NYC highlight, tackling Scope 3 emissions is not a battle that companies have to face alone. In fact, collaboration is the key to driving meaningful change.
Why Collaborate on Scope 3?
No company operates in a vacuum. Every business is part of a larger ecosystem, relying on suppliers, distributors, and even customers to deliver its products or services. This interdependency means that addressing Scope 3 emissions requires collective action. In fact, a recent report by the Carbon Disclosure Project (CDP) and Boston Consulting Group (BCG) found collaborating and engaging with your suppliers was one of the three statistically significant factors that mattered in managing Scope 3 and for climate action. Here’s our key takeaways from the report.
Addressing Scope 3 emissions isn’t just about saving the planet - it's good business management. Investors, regulators, and consumers are demanding more accountability on emissions. Companies that don't act face risks to their reputation and their bottom line. Rather, those that proactively engage with their supply chain on Scope 3 emissions can turn decarbonisation into a competitive edge, strengthening relationships with partners, future-proofing supply chains, and enhancing brand image.
Take, for example, a multinational corporation working closely with its suppliers to improve their energy efficiency. Not only does this reduce the suppliers' emissions and create cost savings for them, but it also helps the corporation to reduce its Scope 3 emissions and move closer to their net zero targets. The benefits flow both ways. When companies work together to improve data transparency and set emission reduction targets, they create a clear path towards a shared goal that is a win win for each other - strengthening business relationships while contributing to the global effort to limit warming to 1.5 degrees.
Collaborative action is all about fostering both sustainable progress and long-term partnerships.
🎓 Curious about how to calculate Scope 3 emissions? Check out our learning blogs:
Understanding Scope 3 Emissions
Scope 3 Emissions - How do you account for Purchased Goods and Services?
Collaboration Creates the Ripple Effect to Unlock Value
Collaboration is what’s needed for companies to share knowledge, best practices, and data, especially when time is of the essence in addressing climate change. Climate leadership from major corporations can make a difference. Companies like Amazon and Walmart are leading by example, engaging with their suppliers, providing resources and support, and using their influence to incentivise suppliers to decarbonise.
Influence and leadership doesn’t only need to be from large corporations, every business, regardless of size, is capable of doing the same. Every business has suppliers that they can engage with, and we see practical education is the key support every business needs right now. That’s where Sumday comes in. Check out our 4 step guide for Scope 3 Engagement on how you can support your suppliers.
Collaboration is also what will make carbon emission numbers meaningful. When businesses start Carbon Accounting, it enables them to understand where and what activities, drivers, and sources in their business are causing emissions. When businesses can understand, measure, and report Scope 3 emissions using accurate data that reflects their actual supplier purchases, rather than relying on outdated industry averages emission factors as proxies, decision-making is truly transformed. This is when businesses can begin making informed decisions based on the credible carbon impact of suppliers, rather than relying on leaf logos and the loudest voice in the marketing arena.
At Sumday, we see carbon accounting becoming a natural extension of normal accounting and reporting for all businesses. Accountants, advisors, and finance teams are key players that can bring the rigour to deliver transparent and trusted carbon data - data that is meaningful and helps businesses fast-track their reduction efforts.
It’s time to get going. We’d be happy to chat over a call or get started with a 30 day free trial here.
