More than a third of the world’s largest 2,000 companies have set net-zero targets covering scope 3 emissions – but only 16% are on track to meet them. What’s behind this wide gap between ambition and action? A major factor is the lack of carbon transparency across global supply chains, which has led to an overreliance on generic industry emissions averages in place of real supplier data. However, our research shows that this data gap can be overcome with the right supplier insights and tools. This article highlights why primary emissions data is the key missing piece in the scope 3 puzzle – and why empowering suppliers to report and share this data can transform your decarbonization strategy.
The supply chain decarbonization challenge: Why primary emissions data matters
Scope 3 measurement poses a unique challenge. Most organizations rely on secondary data – industry averages or estimates – to calculate supplier emissions. While this approach provides a necessary starting point, it lacks the accuracy and specificity needed to pinpoint carbon risks and identify opportunities for driving efficiencies and meaningful reductions across the supply chain.
Primary emissions data – actual data provided directly by suppliers on their activities and operations – is essential for:
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- Accurately measuring your carbon footprint and setting reduction targets: Unlike secondary data, primary data provides a clearer picture of your carbon footprint, enabling science-based target setting and progress tracking.
- Making informed business decisions to optimize your supply chain: Reliable emissions data enables you to more precisely identify emissions hotspots, compare supplier performance and integrate carbon criteria into your procurement strategies – leading to risk reductions, cost savings and enhanced resilience.
- Improving transparency and reporting: Despite a shifting regulatory landscape, carbon reporting and requirements continue to rise globally. Companies with precise supplier data and a strong reporting approach will be better positioned to comply with evolving regulations and gain a competitive edge.
Supplier engagement: The key to unlocking high-quality data
To collect high-quality primary emissions, you need to effectively engage suppliers and provide tools and support to help them improve their measurement and reporting capabilities. But this is no easy task. Many companies struggle with limited resources, complex supply chains and suppliers that are still in the early stages of their decarbonization journey. Here are some strategies to drive enhance collaboration around carbon:
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Educate and empower your suppliers: Equip suppliers with the tools, resources and training they need to understand carbon accounting – not just as a compliance requirement, but as a strategic advantage. Many suppliers lack internal expertise, so breaking down complex concepts into practical, industry-specific guidance can help accelerate their progress.
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Streamline data collection: Make it easy for suppliers to report emissions by adopting a centralized, user-friendly platform that minimizes manual effort. Providing templates, data estimators and direct integration with existing systems can significantly reduce friction and improve data accuracy and quality.
- Align incentives: Show suppliers what’s in it for them. Beyond regulatory compliance, emphasize how transparent emissions reporting can strengthen buyer relationships, unlock preferential contracts and position them as a supplier of choice in a market increasingly favoring sustainable partners.
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How technology helps bridge the transparency gap
The right technology plays a pivotal role in facilitating supplier engagement and ensuring data quality. Next-gen tools use advanced capabilities to simplify the process of collecting and analyzing emissions data from thousands of suppliers. Here’s how:
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Centralized data management: Bring all supplier emissions data into a single, integrated platform to simplify analysis and decision-making. This eliminates data silos, enables cross-supplier comparisons and provides a clear, real-time view of carbon hotspots across your supply chain.
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Streamlined workflows: Cut down on inefficiencies by streamlining key processes like data requests, reminders and validation. This not only reduces the administrative burden for both you and your suppliers but also improves response rates and ensures more consistent, timely reporting.
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AI-driven data quality validation: Use advanced AI tools to gauge the credibility and reliability of the data submitted by suppliers. This adds an extra layer of assurance, helping you build a more reliable and precise carbon footprint.
- Transparency and collaboration: Give suppliers access to intuitive dashboards where they can track their emissions performance, benchmark against industry peers and identify areas for improvement. When suppliers see their progress in context, they’re more likely to take ownership of their emission reduction efforts and stay engaged in the process.
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A win-win for buyers and suppliers
Engaging suppliers in carbon management isn’t just about compliance – it creates mutual value for both sides. Buyers gain access to high-quality data for actionable insights and accurate reporting. In turn, suppliers can strengthen relationships, stay ahead of regulatory requirements and position themselves as sustainability leaders.
Managing scope 3 emissions doesn’t have to be a guessing game. By prioritizing supplier engagement and leveraging innovative tools to validate and analyze primary emissions data, you can transform your scope 3 decarbonization strategy and take meaningful steps toward your sustainability goals.
Let’s talk about your supplier data challenges and how you can overcome them. Schedule a call with us today to get started.
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