When it comes to assessing the carbon footprint of your business, it’s time to face up to net zero’s biggest challenge, says Ben Jones of Aethr Associates
In recent years, much of the focus has been on companies’ Scope 1 and Scope 2 emissions, which means their own direct emissions and the indirect emissions that result from the energy they buy.
But the carbon footprint of most businesses extends beyond the organisation itself. Typically, between 70 and 90 per cent of total emissions are created through supply chains, not internally.
This is unsustainable. So, as governments and business commit to net zero deadlines, attention has expanded to include tackling external, supply chain-related Scope 3 emissions.
This is a big challenge. Big food and big retail have already started to recognise the significant role that suppliers play in their carbon footprint story. But Scope 3 emissions are complex, and calculation methods relatively immature.
How, therefore, do you reverse an agricultural and supply chain revolution built on fossil fuels? It’s not easy, because right now there are some frailities in terms of measurement and mitigation. For example…
Measurement complexity
Scope 3 emissions arise from a broad range of activities across the value chain and involve a multitude of stakeholders.
Data availability and quality
Obtaining emission data from suppliers, particularly smaller entities with inadequate data processes, is an arduous process.
Boundaries and scopes
With numerous standards and methodologies, a clear understanding of Scope 3 emissions is challenging and comparisons inevitably misleading.
Engagement with suppliers
Encouraging suppliers to reduce emissions proves challenging due to varying levels of commitment and resources.
Regulatory complexity
Reporting and compliance requirements vary significantly by region and industry for businesses operating in multiple jurisdictions.
Buyer behaviours
Understanding how consumer behaviour might be affected by efforts to reduce carbon footprints is crucial. Will retail buyers choose local alternatives over imports due to their emission profile?
At Aethr Associates, we recognise that measuring a carbon footprint, including Scope 3, is just the beginning. With stakeholders increasingly mandating the calculation of total carbon footprints, and the implementation of net zero action plans, annual carbon footprinting will become the norm.
To translate that into action, you need to engage positively with suppliers. But this takes time and resource. Other priorities, like water shortages or plastic reduction, could take precedence.
Regardless of where you are on your sustainability journey, there’s no time to waste. In the coming years, navigating the path to net zero will undoubtedly challenge even the most resilient businesses.
