Accenture Eyes Scope 3 Emissions Across Complex Supply Chains
December 8, 2022
December 9, 2022
Data model mapping relationships between industries and countries provides
better visibility in complex supply chain networks, enabling more effective
strategies to significantly reduce Scope 3 emissions by 2050
need full visibility across their supplier base in order to make significant
progress on net zero targets by 2050. However, that visibility is challenged by
the fact that nearly two-thirds of upstream Scope 3 emissions in supply
chains come from suppliers that companies don’t deal with directly, according to
a new report by Accenture.
Thought you knew the Scope 3 issues in your supply chain?
Think again. report examines carbon intensive “hot spots” in supply
chains across supplier tiers, identifying where greenhouse gas (GHG) emissions
are significantly higher and potentially more difficult to reduce. For the
report, Accenture developed a data model that uses industry- and country-level
trade and emissions data to calculate the Scope 3 contribution of suppliers to
their customers and create an accurate picture of the location and size of
upstream GHG emissions.
“Scope 3 emissions are elusive and difficult to track in today’s complex supply
chains. Many large companies don’t even know the suppliers beyond Tier 1, let
alone have any sort of influence or control over them or their sustainability
practices, which is why we have seen little progress in reductions to date,”
said Kris Timmermans, Accenture’s Supply Chain lead. “Armed with the knowledge
of where their emissions sit, companies can do the really important thing –
commit to taking action and collaboration with the entire supplier base and all
stakeholders, toward a more sustainable future.”
The model Accenture created can show upstream emissions by country, industry and
supplier tier — for example in German automaking revealing beyond the known
suppliers in Germany and China to those buried deeper in supply networks from
other countries like Poland and South Africa. The model also compares upstream
Scope 3 emissions with Scope 1, finding wide variation across industries — for
example, the high tech industry’s upstream Scope 3 emissions are 28 times as
large as its Scope 1 emissions, compared with the utilities sector, where
upstream Scope 3 is only one-fifth the size of its Scope 1 emissions.
Accenture’s analysis reveals that in most cases, if upstream emissions are a
significant portion of a company’s total emissions, they tend to occur deeper in
the supplier network. For example, upstream Scope 3 emissions for the aerospace
and defense industry is many times the size of its Scope 1 and 2 emissions, and
these upstream emissions are buried deep in its upstream supplier network — only
20% of its emissions come from its Tier 1 suppliers.
“Our recent research shows that only 7% of companies are on track to reach their
net zero commitments, revealing that for the other 93% of businesses, the time
to act is now,” said Peter Lacy, Accenture’s Sustainability Services lead and
chief responsibility officer. “Even amid economic volatility, ambitions around
sustainability are on the rise, however tapping into carbon intelligence is an
important piece of the puzzle in converting those ambitions into action and
impact. Tomorrow’s leaders are collaborating today to enable circularity and
increase sustainable outcomes across the value chain.”
With increased visibility into upstream Scope 3 emissions and carbon
intelligence embedded into the core business, companies can make better-informed
decisions about how and where to allocate resources; ensure responsible
procurement throughout the organization to drive meaningful reductions; and
uncover broader enterprise value by creating more efficient, resilient,
cost-effective and customer-centric supply chain networks.
The report recommends five key actions that all companies can take now to
achieve that visibility:
a real multi-tier emissions hot spot analysis to set targets and drive the right
actions. The insights from such an analysis provide the foundation for an action
plan to address the areas of most significant impact.
Embed sustainability into category planning and supplier selection. Depending on
the hot spot areas identified, a company can customize category plans, including
emission-reduction strategies, to address hot spots as appropriate.
Integrate emissions into the supply chain control tower and implement a digital
twin. Control towers that centralize visibility and decision making and guiding
actions with short- and long-term benefits combined with a digital twin of the
supply chain generates the end-to-end visibility necessary to optimize supply
chain networks across service, costs, quality, and sustainability — in real
Support suppliers in their ongoing decarbonization efforts. Segmenting the
supplier base can help companies tailor their engagement programs appropriately,
as long as they’re also improving supplier data quality.
Collaborate across sectors, with peers, suppliers and ecosystem partners to
speed up decarbonization at scale. An intelligent platform solution to aggregate
data from multiple parties and make recommendations on the most effective steps
towards decarbonization is critical.