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Alan Holland, chief executive officer of Keelvar, describes the challenge of measuring the carbon emissions of suppliers in multi-tier global supply chains.
As defined by the Greenhouse Gas Protocol, Scope 3 emissions are those emanating from a company’s suppliers — in other words, those that lie outside the control of the original equipment manufacturer. Scope 3 emissions “are inherently more difficult to measure and control, because they’re not coming out of your factories,” says Holland. Sources include producers of components and raw materials, as well as transportation providers.
Growing awareness of the importance of measuring Scope 3 emissions has major implications for sourcing and procurement. For businesses with manufacturing supply chains, Scope 3 emissions can account for between 65% and 90% of total emissions, notes Holland. “It’s imperative that companies get a handle on this.”
The measuring of Scope 3 emissions must become an integral part of the supplier selection process. “Procurement is very much on the front line now,” says Holland. By making emissions a criterion for selection, OEMs can realize dramatic reductions in overall carbon emissions.
Via EcoVadis
