A comprehensive guide to understanding, measuring, and reducing supply chain emissions while achieving 5-10% cost savings.
Supply chain emissions, also known as Scope 3 emissions, account for 70-80% of most organizations' total carbon footprint. These are indirect emissions that occur in your value chain, including purchased goods and services, transportation, and end-of-life product treatment.
By optimizing your supply chain, you can achieve significant environmental and financial benefits simultaneously—typically 5-10% reductions in both carbon emissions and operational costs.
Scope 3 encompasses all indirect emissions in your value chain. It's divided into 15 categories:
Follow these steps to assess your supply chain emissions:
Calculate current emissions across all Scope 3 categories relevant to your business
Determine which categories and suppliers contribute most to your footprint
Collect data from key suppliers on their emissions and practices
Define reduction goals aligned with science-based targets
Create action plans for each high-impact category
Work with top suppliers to reduce their emissions. Often yields 15-20% reductions with minimal cost.
Consolidate shipments, optimize routes, and shift to lower-carbon transportation modes. Saves 10-15% in costs.
Reduce packaging weight and material, use recycled content. Quick wins with immediate cost savings.
Design for reuse, recycling, and end-of-life recovery. Reduces waste and creates new revenue streams.
Transition to renewable energy in operations and encourage suppliers to do the same. Long-term cost benefits.
Track progress using these key metrics:
GHG Protocol: Comprehensive emissions accounting standards
Science-Based Targets: Guidance on setting credible reduction targets
CDP Supply Chain: Supplier engagement and disclosure platform