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See your Scope 3 ?
Kris Timmermans and Jan-Willem Jannink of Accenture discuss how the upstream supplier base should be intrinsic to sustainability strategy
Supply chains generate around 60 percent of all carbon emissions globally , making them critical in the fight against climate change . Business leaders recognize that they must reduce emissions faster . According to an Accenture study , almost half of CEOs claim that building a responsible supply chain is now part of their sustainability strategy .
A global trend toward more regional sourcing and production helps mitigate the issue . However , commitment and regionalization strategies don ’ t change the fact that companies lack visibility into the largest source of emissions – their upstream supplier base . These suppliers are responsible for the bulk of what ’ s known as Scope 3 emissions . By not seeing their Scope 3 emissions , companies can ’ t take the actions necessary to reduce them .
Here ’ s the scoop : We have found that Scope 3 emissions are 11.4 times greater than all other emissions combined . Our analysis also provided additional crucial insights for supply chain executives :
■ Network complexity strongly influences emissions strategies . For example , in the energy , utilities and natural resources industries , most upstream emissions are concentrated in suppliers closer to the purchasing company . But in the aerospace and defense , high-tech and automotive sectors , upstream emissions are concentrated in suppliers further up the supply chain . On average , 80 percent of high-tech companies ’ upstream emissions come from Tier 2-plus suppliers .
■ Sources of emissions vary significantly by industry sector and location . For some industries , hot spots are power generation . For others , it may be raw materials and transportation .
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