Scope 3: Why Engaging Key Transport Suppliers is Crucial

Scope 3 emissions – those from the value chain – make up the majority of a company's carbon footprint, but they are hard to track and difficult to manage.

As sustainability priorities shift, more businesses are exploring ways to reduce these problematic emissions.

Recent analysis from RESET Carbon shows that significant reductions are possible through strategic supplier sourcing decisions.

A need for sustainable sourcing

RESET Carbon is a Hong-Kong based LRQA company, working to resolve the climate crisis. It focuses on helping clients build carbon reduction strategies and end-to-end decarbonisation solutions using science-backed methodologies.

The UN has stressed the urgent need for Scope 3 reductions, with related emissions endangering the feasibility of achieving global temperature targets set in the Paris Agreement. By targeting Scope 3 emissions, which, on average, account for more than 80% of a company's carbon footprint, businesses can make a real difference.

RESET Carbon's analysis recommends businesses tackle Scope 3 emissions by engaging a small group of key suppliers. While real change relies on supplier actions, many struggle knowing where to begin when it comes to beginning the green transition. 

“Supply chains are becoming increasingly exposed to carbon pricing via the incoming EU Carbon Border Adjustment Mechanism or exporter country emissions trading or carbon taxes," says Liam Salter, CEO of RESET Carbon. 

"If businesses want to avoid long-term carbon cost risks, they need to act now. Supply chain emissions take time to reduce. We’re talking three years or more to see meaningful results.”

Procurement strategies

RESET Carbon says procurement teams must target key suppliers to help their organisations make a greater impact.

By strategically collaborating with suppliers on energy efficiency or switching fuels, significant reductions can be achieved – as demonstrated across the apparel industry in Vietnam. 

The analysis finds that, across manufacturing and retail supply chains, initial emissions cuts of 15-30% can occur quickly through collaboration on existing technologies to improve energy efficiency. Bigger cuts of 40-60% can be made possible through energy or fuel switching.

By collaborating on procurement decisions, businesses can make a significant difference to their Scope 3 emissions.

To achieve faster carbon reductions across operations, RESET Carbon recommends three key strategies.

Turn data into delivery plans: Carbon hotspot mapping should begin at supplier facility level, which is where emissions are most significant. Many companies already have the data, but they struggle to translate it into delivery plans. By integrating targets into sourcing decisions, businesses can ensure carbon performance becomes a key part of commercial strategy. Liam adds: “There’s often a misconception that carbon reduction means high cost. In reality, many reductions can be delivered through measures like efficiency and onsite renewables, with strong returns on investment.”

Work with strategic suppliers to increase effectiveness: By partnering with high-volume vendors, businesses can scale low carbon solutions and clean technologies. Brands in sectors such as energy, apparel, consumer goods, technology and food and beverages have already begun reducing emissions in their supplier base. For transport networks, which face dispersed emissions across suppliers, fleets and global routes, aligning measurement approaches under protocol and using digital tracking systems will help build transparency. Liam continues:  “Strategic suppliers represent a major lever for net zero progress. Even if supply networks shift in response to economic or regulatory factors, established high-volume vendors are often best placed to meet performance expectations. Their ability to scale low carbon solutions, implement clean technologies and collaborate on emissions planning makes them critical to any serious net-zero supply chain strategy.”

Cross-industry collaboration: By collaborating across the industry, businesses can scale solutions by coordinating reporting, sharing supplier performance benchmarks and co-investing in low carbon supplier pools. Standardised data frameworks help ease the burden on suppliers who have multiple buyers, and procurement teams can compare emissions performances across facilities or products through benchmarking tools. 

By working collaboratively with suppliers and setting up a data framework can provide procurement teams with the transparency needed to make smart sourcing decisions. This can, in turn, ensure businesses are building sustainable strategies to reduce Scope 3.