Solving the Scope 3 emissions challenge is one of the most powerful levers to accelerate decarbonization for metallic products. And to monitor the CO2 emissions in supply chain is essential for manufacturing companies to gain a comprehensive understanding of their carbon footprint. In this article we present six steps how you can get started with your company´s upstream data collection.
The reduction of Scope3 emissions is a critical challenge. Often referred to as the lion’s share of companies’ carbon footprints, making up 65–95% of most companies’ carbon impact. An indirect consequence of a company’s activities outside its direct control, i.e., purchased goods and services, transportation, and distribution upstream and downstream in the supply chain.
SME´s are often challenged when they aim to derive and report the emission from their supply chains. A more structured and step-by-step approach could make it easier to comply with regulations, mitigate risks, and identify opportunities for cost reduction and efficiency:
STEP 1 – Define the scope of data collection
What are the main processes in your supply chain? Who are your main suppliers and where are they situated? And what are the transportation legs within your supply chain? These are three important questions when mapping the value chain and defining the scope of your data collection.
Many companies lack primary data to accurately account for their supplier network´s and Scope 3 emissions. The Pathfinder Framework is a comprehensive approach to help organizations measure and manage their Scope 3 emissions. The Framework is open with free access for everyone, and provides guidance documents, technical resources, and tools that help SMEs to effectively plan for the calculation of emission data for Scope 3 and take meaningful actions to reduce their environmental impact throughout their value chain. To estimate the main activities in each route will give you an indication on how to prioritize in the next step.
STEP 2 – Prioritize data collection for identified hotspots
Analyze what processes, suppliers, and transportation legs have the largest emission impact. Determine which categories are relevant to your business, and identify the emissions sources within each category that are significant for your organization. This will help you decide on which of your processes and suppliers you should prioritize.
STEP 3 – Start collecting data from your suppliers
Start to collect the necessary data for each emissions category from your suppliers. By digitally collecting and categorizing primary data from your supplier network, you can improve visibility, visualize the allocation and emission hotspots, as well as share selected CO2eq data and improve value chain collaboration to start your journey toward a net-zero supply chain.
Once you have the data, use appropriate emission factors and calculation methodologies to quantify the emissions associated with each category. Pathfinder Framework provides emission factors and calculation guidelines for different Scope 3 categories, which can help you estimate your emissions.
STEP 4 – Verify and validate your data set
To ensure accuracy and reliability, and avoid risk of green washing that might damage the reputation of your brand, we advise you a 3rd party audit, focusing on validating your data validation models and processes, rather than validating each individual dataset.
Regardless of the purpose for emission data collection – internal follow up of emission drivers for decision making, or for external communication or regulatory reporting – to be transparent with your data quality and calculations is a valuable assurance for all stakeholders.
STEP 5 – Evaluate and set a decarbonization target plan
Analyze the calculated emissions data to identify hotspots and areas for emission reduction. Set ambitious reduction targets aligned with your sustainability goals and develop action plans to achieve those targets. Collaborate with stakeholders to implement mitigation strategies.
Continuously monitor your emissions and track progress towards your reduction targets. Regularly report your Scope 3emissions data and reduction efforts to stakeholders, both internally and externally. This transparency demonstrates your commitment to environmental sustainability.
STEP 6 – Improve your data collection and reporting processes
Over time, refine and improve your data collection and reporting processes based on lessons learned and feedback from stakeholders. Streamline data collection, automate calculations where possible, and adopt emerging best practices in emissions accounting.
“The best time to accurately account for, exchange, and reduce Scope 3 emissions was yesterday. The second-best time is now.” - Pathfinder Framework
ChainTraced help companies to digitally collect and calculate CO2eq data end-to-end in the metallic value chain. We´d be happy to connect and help you establish a more accurate and reliable view of the current footprint as means to driving decarbonization. Learn how ChainTraced helped voestalpine gain key insights in the emission drivers in their value chain. Find the customer case here