How Supply Chains Are the Answer to Decarbonization: Insights From Accenture

May 26, 2023 EcoVadis ‏‏‎

Speaker: Matias Pollmann-Larsen, Global Lead for Sustainable Value Chain at Accenture, hosted by Fergal Byrne, Executive Producer, The Sustainability Agenda 

Available on: Spotify | Apple Podcasts | Google Podcasts | Sticher

Supply chains is what keeps the world going. So it's no surprise that they generate 60% of global emissions. If we want to accelerate decarbonization globally and if we want to meet our ambition to decarbonize by 2050, supply chains are the answer. In a discussion with Fergal Byrne, Matias Pollmann-Larsen, Accenture's Managing Director, Global Sustainable Value Chain Lead, sheds light on the importance of supply chain decarbonization and the strategic benefits that arise from embedding sustainability throughout the organization. 

Strategic Why's Behind Supply Chain Decarbonization

By addressing Scope 3 emissions and extending decarbonization efforts beyond a company's own operations, companies can gain valuable insights into their value chains, which informs strategic decision-making, risk mitigation and cost reduction throughout the entire value chain.  By increasing visibility into emissions upstream, companies can identify geographic exposures and associated risks, such as dependence on carbon-intensive energy sources. This knowledge enables companies to make informed decisions, strategically review their value chains and optimize logistics and energy consumption for cost efficiency.  Plus, working with suppliers on decreasing their carbon footprint fosters collaboration, improving efficiency further. 

Obstacles and Challenges

Despite the growing ambition and net-zero targets set by many companies, progress in dealing with Scope 3 emissions remains limited. Only 10% of companies track Scope 3 emissions, and even fewer (9%) achieve their emission targets. Key obstacles include data challenges, collaboration dilemmas, the need for volume aggregation of demand, and the necessity of breaking silos to navigate trade-offs.

See also Accenture's research report on Scope 3 visibility issues: 

Scope 3 visibility

A Holistic Approach to Sustainability

A company's approach to Scope 3 emissions and supply chain decarbonization is interconnected with its overall approach to sustainability. Matias suggests five essential elements for a successful approach: a simple and compelling narrative linking sustainability and enterprise value creation, value-based tracking of sustainability efforts, integration of sustainability into core business operations, breaking silos to navigate trade-offs, and being data-driven and technology-powered.

Industry and Geographic Variances in Scope 3 Emissions

Scope 3 emissions vary across industries and geographies. On average, Scope 3 emissions are more than 11 times greater than Scope 1 and 2 emissions, with sectors like aerospace and defense and high-tech technology showing even larger discrepancies. The majority of Scope 3 emissions in the high-tech sector (80%) are hidden beyond direct suppliers. Identifying hotspots and understanding these variances helps companies target specific areas for decarbonization within their value chains.

About the Scope 3 Agenda Podcast Series

The Scope 3 Agenda Podcast is a monthly series produced by EcoVadis in collaboration with  Fergal Byrne from The Sustainability Agenda featuring stories from senior business leaders working on supply chain decarbonization to reduce Scope 3 emissions across different industries. In the ten episodes we talk to business and thought leaders from a range of industries and explore strategies, challenges and lessons learned by companies who have embarked on a decarbonization journey.

EcoVadis Scope 3 Podcast: How and Why Scope 3 Carbon Emissions are Rising on the Business AgendaLessons from a Practitioner: Overcoming Key Challenges and Ørsted's Net Zero JourneyEcoVadis Scope 3 Podcast: Decarbonizing Supply Chains: Setting the Scope 3 Frame and the Role of StandardsThe Role of Procurement in DecarbonizationLessons from a Practitioner: Carlsberg's Tactical Approach to Tackling Supply Chain EmissionsLessons from a Practitioner: How Schneider Electric Uses Targets to Decarbonize Its Value ChainInsights from the World Economic ForumLessons from a Practitioner: IKEA’s Holistic Take on Emission Scopes and Total Business Impact

About the Author

EcoVadis ‏‏‎

EcoVadis is the world’s most trusted provider of business sustainability ratings, intelligence and collaborative performance improvement tools for global supply chains. Backed by a powerful technology platform and a global team of domain experts, EcoVadis’ easy-to-use and actionable sustainability scorecards provide detailed insight into environmental, social and ethical risks across 200+ purchasing categories and 175+ countries.

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