Supply chain decarbonization: A step-by-step voyage to sustainable efficiency

There’s always room for supply chains to be better. But that doesn’t just mean making them faster, more reliable, or easier to track.

That’s all great, of course, and really important for movers of goods, but the elephant in the room is the impact on our planet.

Global supply chains are responsible for a huge proportion of the world’s carbon, and make up around 90% of the average business’s greenhouse gas emissions.

That’s something that has to change for a sustainable future, and the good news is that companies are starting to stand up and take action. 

In fact, supply chain decarbonization is quickly becoming a business priority, with 94% of organizations that signed up to the Science Based Targets Initiative (SBTi) in 2020 making commitments to reduce emissions directly and through their relationships with customers and suppliers.

We know that reducing supply chain emissions isn’t always as easy as it should be, so let’s take a closer look at a few steps every business can take to start moving the needle.

Step 1: Assess your own carbon emissions

Decarbonization starts at home and every business has the power to make a difference – big or small. 

So before you get into the details of what your partners are doing, make sure you’ve got a clear understanding of your emissions and how you might be able to reduce them. 

‍Measuring your emissions, wherever they are

As a first step, you’ll need to work out what your direct emissions are. These are typically split into two categories – Scope 1 and Scope 2:

• Scope 1 emissions are all the emissions that a business has first-hand responsibility for, including everything from fuels burnt during production and the running of company-owned vehicles through to the impact of an air conditioning system.
• Scope 2 emissions are a little further out of your control, and are made up of the emissions that come when you purchase any energy from a third party.

For most businesses, these two categories are relatively easy to measure if you’re collecting the right data around energy used on-site and energy purchased.

But if you’re not sure where to start, the American Environmental Protection Agency has published some helpful guidance on Scope 1 and Scope 2 Inventory Guidance that covers different methods for collecting and reporting accurate information. 

‍Setting targets

With up-to-date Scope 1 and Scope 2 emissions data, the important work of reducing emissions can begin.

But to make sure you’re moving in the right direction, it’s always best to have a clear idea of the targets you want to reach and how you’ll reach them.

Those Science Based Targets that we mentioned earlier are specially developed goals designed to limit global temperature increases to less than 1.5°C.

They apply to every area of the supply chain, and are customizable to suit the needs and current sustainability standards of your business.

That flexibility is essential, because where one business might set a science based target of reaching net zero within 10 years, another may be able to get there sooner – or take a little longer.

It’s a great process, because once you’ve submitted a target, the SBTi will review your submission, check it against a science-based criteria, and then give you detailed feedback on whether it’s appropriate and realistic.

For example, one of Maesrk’s Science Based Targets is to reduce absolute scope 1 and 2 GHG (greenhouse gas) emissions 42% by 2030 from a 2021 base year. They have also committed to reduce absolute scope 3 GHG emissions from upstream transportation and distribution 42% within the same timeframe.

Reducing your direct carbon emissions

Whether your business decides to formally commit to a target in line with the SBTi’s criteria or not – once you’ve set goals, there are plenty of ways to reach them.

At a Scope 1 level, streamlining processes, investing in EVs, and anything else that cuts your carbon consumption will add up quickly. 

While for Scope 2, the biggest immediate change you can make is switching to a low-carbon energy supplier, or even producing your own renewable energy. 

For both scopes, you can also use Beacon’s partnership with Lune to offset any carbon use you can’t eliminate, for a truly net-zero impact.  

Step 2: Go a step further with supply chain emissions 

As well as scope 1 and 2, there’s a third type of emissions called (you guessed it) scope 3 emissions.

This is where your supply chain comes into play, with scope 3 being a much broader category that includes all of the indirect carbon emissions connected to your business. 

This is where a lot of supply chain emissions sit, with every part of the process having an impact.

That’s one of the reasons why it’s so important to invest in supply chain visibility – because without it there’s almost no way of knowing how much carbon is being generated as a byproduct of your day-to-day operations. 

‍Understanding and measuring supply chain emissions

In the past, untangling scope 3 supply chain emissions from your full network of partners would be a complex, if not impossible, job due to the use of inconsistent methodologies.

But Beacon’s supply chain sustainability software cleans things up. 

Our carbon tools show emissions across the supply chain, drawing on key data like distance traveled, shipment weight and vessel characteristics. 

Reducing supply chain emissions and setting supplier standards

With Beacon’s insights, there are a few different ways to reduce your carbon footprint. You might want to use our data to select routes or carriers with a reduced impact. Or directly offset your scope 3 emissions in just a few clicks from your Beacon dashboard.  

Beacon’s tech can help with all that. But there’s another way to go even further. 

Share! Share your insights with partners and direct them towards helpful resources like the Carbon Disclosure Project (CDP) to help them better benchmark their performance.

You can also use CDP scores to decide what types of businesses you want to work with.

That might mean incentivizing supply chain decarbonization with discounts or bulk deals for more responsible partners.

Or even going a step further and committing to only working with suppliers that meet a certain sustainability score – and ensuring that they’re committed to it during the onboarding process. 

With Beacon, it’s all easy to track, giving you more control over scope 3 supply chain emissions and the global impact of your business.  

Step 3: Make transparency central to sustainability

Whatever steps you take to reduce supply chain emissions and decarbonize your business, it’s always good to be open and honest with customers about what you’re doing and why. 

We live in a world where responsibility really matters. So sharing the moves you’re making – with real data to back it all up – is one of the best ways to reassure everyone who engages with your business that you’re a partner with the right ethics. 

That applies just as much to your partners, even if they aren’t quite as advanced on their sustainability journeys.

Regular updates and information shared between partners can foster a powerful sense of community across supply chains, with everyone helping each other reach their goals and contribute to making a difference together. 

That’s the power to change in action. And better supply chain visibility is its foundation.

So take the next big step on your decarbonization journey today with supply chain sustainability software that goes the extra mile.