Posted: 20 Nov. 2022 3 min. read

Kickstarting a chain reaction

Why we need to team up to solve the Scope 3 emissions challenge

Action on climate change is needed now. By June 2023, all UK-listed organisations will need to publish independently reviewed net zero transition plans. Pressure is mounting on companies to show evidence of their decarbonisation progress and momentum is building.  While there are already some mandatory emissions reporting requirements, such as Streamlined Energy and Carbon Reporting (SECR), and Task force on Climate-Related Financial Disclosures (TCFD) for larger companies, reporting requirements are expanding and coming under increasing scrutiny for accuracy.  

While some organisations are making good progress understanding the carbon footprint of their direct operations and energy consumption (known as Scope 1 and 2 emissions), tracking supply and value chain emissions (known as Scope 3) remains a major hurdle in the race to net zero.

What are Scope 3 emissions?

 Scope 3 emissions include all the indirect emissions from an organisation’s activities, both up and down the value chain. This can range from the goods or materials a company purchases, the suppliers it works with, how its services or products are used and how they are disposed. For many organisations, Scope 3 emissions can represent more than 70 percent of their total carbon footprint. As these emissions fall outside the organisation’s direct control, they can be very difficult to measure – let alone eliminate. Many organisations have thousands of suppliers and each of these have their own suppliers with all these operations and emissions contributing to the make-up of Scope 3. 

Reaching net zero requires new approaches to collaboration and competition

This is especially true when it comes to Scope 3 emissions. After all, one company’s Scope 1 and 2 emissions are another company’s Scope 3. Speaking at NYC Climate Week, Science Based Target Initiative (SBTi) CEO Dr Luiz Amaral likened the challenge to the 1961 Moonshot mission saying, “We don’t know how exactly how we will get there, but together we need to make it happen”.  

Data availability and quality is one of the biggest challenges we need to tackle. Data is often missing, not published or lost in a variety of formats. Most companies currently use global or national averages to calculate their footprint based on the amount they spend, which makes it difficult to differentiate between suppliers based on their carbon footprint and fails to reflect the results of decarbonisation initiatives. For example, a supermarket might identify milk as a significant contributor to their emissions. Whilst a national average factor of 1.24 kg CO2e per kg of milk might previously have been used, this would not reflect the reductions of up to 20% which can be achieved through engagement with suppliers to achieve more sustainable farming practices. 

Getting a more accurate assessment of Scope 3 emissions requires extensive engagement with suppliers and this takes a significant amount of time and resources. So how can we speed this up and work as a team? 

Bringing strength in numbers: Deloitte’s Scope 3 Community 

To help organisations accelerate to net zero and unlock data-driven decarbonisation, we decided to combine our resources and bring procurement leaders together in our Scope 3 Community. Community members can share data, knowledge and experience in order to drive cross-industry collaboration and effective decarbonisation. 

Starting with the IT category, our cloud-based solution enables members to gain calculations, moving from estimates to accurate, more granular product data. We support members to collect, calculate and manage emissions across their supply chains. By providing a holistic overview of supplier emissions data and climate commitments, the platform enables procurement teams to:

  • Create an accurate inventory of Scope 3 emissions, identify emissions hotspots and track progress for carbon reductions 

  • Identify carbon intensive services or products, which can inform procurement decisions and supplier engagement to promote decarbonisation

  • Use data and collaboration to drive change from suppliers 

We are expanding our community to include some of the world’s leading organisations. If you are interested in joining our mission, you can read more about the Scope 3 Community here or contact Eleanor Foster-Gregg

Key contact

Eleanor Foster-Gregg

Eleanor Foster-Gregg

Senior Manager

Eleanor Foster-Gregg is a Senior Manager in our Procurement team, with a passion for making procurement more sustainable. She leads large scale tech-enabled procurement transformations to help organisations to be better equipped for future disruptions. She is the project manager for the Scope 3 Community, and believes this is a fundamental step in the right direction in the Race to Net Zero.