A growing number of reputable companies have seen their Science-Based Targets initiative (SBTi) goals withdrawn. The reason? An inability to meet the stringent requirements set forth for reducing emissions. This trend highlights a troubling gap between initial sustainability commitments and the practical challenges of achieving them.
In a recent report published by the SBTi, 54% of the participating companies “ranked Scope 3 as a barrier to setting a net-zero target” and said that “scope 3 is too much of a challenge”. The bottom line is that most companies aren’t prepared to make long-term net-zero commitments that they can actually meet. This could be due to too many uncertainties within their supply chain, unpredictability about the future, and doubts about making their targets.
What are Scope 3 emissions and why are they important?
Scope 3 emissions are one of the many hurdles procurement and sustainability managers face when trying to reach their net-zero ambitions. These emissions (which account for indirect emissions from activities like procurement, investments, and the use of sold products) are often the most difficult to measure and manage. For many companies, Scope 3 emissions constitute the bulk of their carbon footprint. The lack of reliable data, complex supply chains, and varying levels of engagement across stakeholders cause companies to feel that these emissions are out of their control.
Strategies to overcome this barrier
Although Scope 3 emissions pose a serious challenge, there are a few ways for companies to gain a better grasp on their supply chain and reduce these far-flung emissions.
Collaboration Across the Value Chain: Working closely with suppliers and customers to encourage and support emissions reduction efforts is vital. Initiatives might include joint sustainability projects, sharing best practices, and even financial incentives for reducing carbon footprints. For example, TotalEnergies created a responsible purchasing program focusing on four sustainable pillars including raising supplier awareness, enforcing sustainable requirements, and completing supplier audits.
Setting Realistic, Incremental Targets: Rather than aiming for large, long-term goals from the outset, companies can benefit from setting smaller, incremental targets. This approach allows for adjustments along the way and can help maintain momentum even when challenges arise. Maersk, a Danish shipping company, has focused on reducing their Scope 3 category 4 emissions (upstream transportation and distribution) by launching ECO Delivery which leases heavy electric trucks to their suppliers and provides alternative green fuels for shipping.
Enhanced Data Collection and Analysis: Investing in better data management systems is crucial. Companies can leverage technology to gather more accurate and comprehensive data on their supply chain emissions, enabling more effective decision-making. DitchCarbon uses AI to gather real-time emission data on thousands of suppliers. Equipped with this knowledge, your team can effectively drive change throughout the supply chain and see the difference in your total emissions.
The path to net-zero is complex, particularly when it comes to managing Scope 3 emissions. However, by understanding the challenges and implementing targeted strategies, companies can pave the way for a more sustainable future.
