There is a growing business imperative to build resilient, sustainable value chains. Scope 3 emissions embedded in the value chain, on average, represent 90% of a company’s total carbon footprint; these emissions are significant but historically underreported. As companies unite behind science to guide their actions, there is renewed urgency to address business vulnerabilities and climate-related risks.
Scope 3 emissions result from activities from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts within its value chain (EPA). Scope 3 can include emissions from upstream activities like purchased goods & services or downstream emissions from the use of sold products.
While many companies have set carbon reduction targets for their own operations, few have included emissions spanning their full value chain. Today, the Science Based Targets Initiative (SBTi) requires companies with a large portion of Scope 3 emissions to include those emissions within their targets. Over 1,200 companies have committed to a science-based target, and about 47% of those commitments were made in 2020 alone. Despite increasing commitments, many organizations continue to struggle to mitigate Scope 3 emissions at the necessary pace and scale to meet their ambitious targets.
Value chains are complex and dynamic. Accounting practices alone separate Scope 3 emissions into 15 distinct categories across the value chain, spanning hundreds or thousands of business partners. Once they understand the most significant emission sources, companies must find the best way to engage with their business partners to identify opportunities to reduce the emissions and implement projects to make those reductions happen. Companies need the tools and expertise to identify opportunities, engage suppliers, and implement viable projects to deliver real reductions.
ENGIE Impact helps companies decarbonize their value chains, enabling them to move beyond measurement to transformative action. A wide range of digital tools, analytical capabilities, and deep value chain expertise helps simplify data collection, identify emissions hot spots and arm clients with innovative and flexible business models to achieve Scope 3 emission reductions.
Using state of the art digital tools, ENGIE Impact assesses each company's unique carbon profile to deliver an accurate view of Scope 3 emissions. Our collaborative approach gleans insights from databases, supplier-specific questionnaires, and literature reviews to accurately calculate a company's footprint and identify the most material Scope 3 categories, providing clients with a clear vision of where to focus their efforts.
Granular assessments of the most critical Scope 3 emission categories helps to identify the optimal reduction levers to drive decarbonization across the value chain. Through deep engagement with internal teams and a robust data-driven foundation, ENGIE Impact can identify significant sources of emissions (or 'hotspots') in a company's value chain and develop an emission reduction roadmap. Outcome-oriented roadmaps identify the highest impact business partners, to ensure clients can focus efforts to achieve near-term results.
ENGIE Impact actively engages the highest-emitting partners in strategic categories. Collaboration is paramount in empowering business partners to identify viable emission reduction opportunities and lead project implementation. Projects to reduce emissions take different forms. Value chain experts provide actionable recommendations for high-potential supplier groups to pull strategic decarbonization levers in renewable energy, resource efficiency, and logistics – among others.
ENGIE Impact helps design innovative financing models to bridge capital expenditure needs, enabling clients to implement projects that deliver impactful reductions. We streamline uniform measurement and reporting requirements using a comprehensive suite of advanced technologies to accurately track and monitor Scope 3 emission reduction progress.
"Through deep partnership with key suppliers, strategic direct investment, and a shift in focus from assessment to implementation, companies can significantly accelerate supplier decarbonization." – Myriam Akhoun
For companies to reduce Scope 3 emissions, they must focus on three priorities. First, collect and consolidate required data from target partners to identify hotspots in the value chain. Subsequently, leaders must pull critical strategic levers across the value chain to meet ambitious sustainability goals. Finally, companies must drive value creation through accelerated sustainability transformation.
Ready to build value chain resilience while mitigating your Scope 3 footprint?