Can you see your Scope 3?
Companies around the world are working hard to achieve the goals they have set to help fight climate change. But most still struggle to understand how and where to start. That’s largely because they lack visibility into the biggest source of emissions. That source is their upstream supplier base. These suppliers are responsible for the greatest amount of what’s known as Scope 3 emissions. This lack of visibility prevents companies from taking the actions necessary to accelerate their progress in reducing these emissions, increasing supply chain sustainability and lowering their overall carbon footprint.
New Accenture research changes the equation. Through our analysis, we can provide supply chain network visibility beyond Tier 1. These are the suppliers that companies work with directly. We can provide visibility all the way up to the extraction of natural resources. This has led to deep insights into the main drivers of upstream emissions—"hot spots"—by value chains across industries and geographies. Our research provides a new lens that allows companies to see what’s strategically important to the supply chain and where to focus their efforts.
Scope 3 emissions are 11.4x greater than all other emissions combined
Suppliers beyond Tier 1 represent 64% of total upstream emissions
of their upstream emissions are coming from their international supply chain
Companies that embrace Total Enterprise Reinvention are creating long-term, sustainable value ahead of their peers. Putting AI-powered insights and the digital core at the heart of reinvention and creating a boundaryless flow of data between teams are essential steps in achieving key environmental goals, such as reducing Scope 3 emissions and fulfilling net-zero commitments.
The same industry faces different emissions challenges in different regions. Nearly all supply chains depend on global supplier networks. But the degree of dependency on local versus global suppliers varies by country, even in the same industry. For example, for the Chinese high tech industry, most of the upstream emissions—79% of total—across multi-tier suppliers are generated within China. That figure drops to 59% and 46% for Japan and the US and UK high tech industries, respectively. With most of upstream coming from suppliers outside their home countries, these industries will find it more difficult to gain the required visibility to trace and audit those emissions.
With these insights, companies can identify where and how they should allocate their time and resources to reduce emissions. They can determine how to embed visibility into their broader supply chain capabilities. They can more effectively integrate sustainability into their supply chain sourcing activities, including category planning and supplier selection. And they can understand how to work together with others to reduce emissions and create a more resilient supply chain.
The challenge of reducing emissions is enormous. But it’s not insurmountable. With the right combination of visibility, actions and collaboration, we can reach our goals and create far better supply chains. We can build supply chains that are good not just for business, but also for society and the planet.