Supplier Engagement to Address Scope 3 Emissions

In today's climate-conscious landscape, businesses are increasingly recognizing the critical role of supply chain emissions in their overall carbon footprint. As companies face mounting pressure to reduce their environmental impact, the focus on Scope 3 emissions—those that occur in a company's supply chain—has intensified. Across industries Scope 3 emissions can account for 70 percent of an organization's emissions.

WWT's supplier engagement program, in addition to other sustainability offerings, has seen great success in reducing Scope 3 emissions internally and for clients, and has created a one-stop-shop in the pursuit of corporate sustainability objectives.

The drive for accountability

New regulatory frameworks and stakeholder expectations are increasingly requiring organizations to prioritize transparency in their emissions reporting, particularly concerning Scope 3. These regulations not only require companies to account for their direct emissions (Scope 1 and 2) but also to engage with suppliers and track their emissions through the supply chain (Scope 3). This shift is rippling through the value chain, as many companies are now being required to report on their suppliers' emissions, placing significant pressure on those firms to accurately measure and report their total carbon footprints.

Scope 3 emissions: A major contributor

Data across industries highlights that Scope 3 emissions frequently account for the majority of an organization's total greenhouse gas emissions. This statistic underscores the need for organizations to focus not just on their operational emissions but also on those produced by their supply chains. For instance, a manufacturing company may find that their suppliers' emissions from the production of raw materials and the transportation of its goods far exceed the manufacturer's direct emissions. Therefore, achieving meaningful reductions in carbon footprints will require companies to engage comprehensively with their suppliers.

Supplier engagement is the key to addressing Scope 3 emissions

Since organizations do not have direct control over the emissions produced in their supply chain, they must partner with their suppliers to identify ways to reduce these emissions. The first step for such partnerships is establishing a supplier engagement initiative. 

A supplier engagement initiative entails working with existing suppliers to identify how the emissions of their products can be reduced. 

Examples of addressing supply chain emissions across industries

• Manufacturing: In the manufacturing sector, emissions from raw material extraction and transportation can constitute 70-80 percent of a product's lifecycle emissions. Companies are increasingly adopting concepts such as life cycle assessments (LCAs) analysis to understand and mitigate these emissions effectively.
• Retail: In retail, Scope 3 emissions largely come from the goods sold, covering production, distribution and use. For example, a retailer might collaborate with a manufacturer for bulk shipments. Instead of sending partially full trucks daily, they could switch to weekly deliveries of full truckloads, thus cutting transportation emissions from the factory to the store.
• Food and Beverage: The agricultural sector is another area where Scope 3 emissions are critical. The emissions associated with food production—from farming practices to logistics—often represent more than 80 percent of a food company's total emissions. As a result, leading brands are partnering with farmers to implement sustainable agricultural practices.
• Technology: In the tech industry, emissions from data centers and product manufacturing are well-known. However, emissions from the supply chain, particularly those associated with the production of electronic components, can make up a significant portion of a company's overall emissions profile.

WWT's supplier engagement framework guides its Net Zero strategy

WWT created a proprietary supplier engagement process as a major focus of its drive to achieve Net Zero carbon emissions by 2050. The process has identified best practices, created playbooks and developed a scalable model that can be applied by other organizations for effective supplier engagement. Because 99 percent of WWT's carbon emissions come directly from the products it purchases and sells, this supplier engagement framework has become the cornerstone of the plan to reduce WWT's carbon emissions.

This sophisticated supplier engagement involves analytically segmenting the supplier base and determining the most appropriate methods for engaging them to jointly reduce shared value chain emissions. As always though, the most important first step of any successful supplier engagement model begins with collaboration from a network of partners.

In this model, WWT's comprehensive sustainability advisory incorporates expertise in implementing sustainable technology (for example, automated carbon accounting platforms), developing strategy and utilizing data and AI foresight to constantly innovate and stay ahead of the curve to help its clients achieve their sustainability targets.

Outcomes of successful supplier engagement in WWT

Supplier engagement is not straightforward and requires a great amount of effort in terms of stakeholder collaboration, time, and informed decision making. Hosting a one-time check-in or even a large-scale town hall with suppliers will merely be an expensive exercise in meeting minimum compliance but will not resolve the major issues at hand. However, a thoughtful end-to-end supplier engagement can be a net benefit to the organization pursuing it.

WWT recognized the value of a well-executed supplier engagement project and created a streamlined process tailored to its clients' needs. Following this process internally has led to innovations and deeper partnerships with suppliers:

1. Recognizing the need for significantly increased visibility and transparency in the supply chain, WWT worked extensively with multiple key suppliers to obtain key emissions data on products purchased. This data has been consolidated into WWT's new CarbonTechAware database, a market first. This database of the anticipated lifetime carbon emissions of various IT devices, helps WWT and its clients make informed purchasing decisions or work with suppliers to manage emissions. With over 10,000+ devices cataloged, it offers precise emissions data, avoiding outdated and generic estimates. For instance, customers can now easily find exact emissions for a device in a printable Excel format from one location instead of reaching out to each individual supplier.
2. Stronger WWT-supplier relationships has led to WWT being featured in supplier sustainability reports and other major sections of their websites.

Innovative offerings, strong partnerships and additional brand exposure are just some of the outcomes which can result from a well-crafted and executed supplier engagement.

Next steps towards sustainable decision making 

These themes highlight efforts to address an organization's Scope 3 emissions. Our second article will discuss specific tools for achieving these objectives.

WWT's dedication to sustainability and proactive efforts to address supply chain emissions enabled it to create a robust supplier engagement process, fostering innovation and strategic relationships with its largest suppliers. This process has been utilized by WWT's clients across sectors.

Advance your sustainability objectives by tackling the significant challenge of Scope 3 emissions with WWT's comprehensive solutions. Contact us to learn more and get a personalized consultation.