Thought you knew
the Scope 3
issues in your
supply chain?
Think again.
Gaining visibility to hidden
hot spots to move from
targets to action to value
From insights to action, the path to extraordinary value starts here.Acknowledgments
Kris Timmermans Research Marketing + Communications
Lead – Supply Chain & Operations
Stephen Meyer Ingrid Rubin
Peter Lacy Accenture Research Lead – Marketing + Communications Lead –
Lead – Sustainability Services Supply Chain & Operations Supply Chain & Operations
& Chief Responsibility Officer
Bobby JamesTereza Holubová
Jan-Willem Jannink Accenture Research Manager –Marketing Specialist –
Managing Director – Industry X,Supply Chain & Operations Supply Chain & Operations
Sustainable Value Chain Lead
Deepak Tantry
Stephen MeyerAccenture Research Associate Manager –
Accenture Research Lead –Supply Chain & Operations
Supply Chain & Operations
Yuhui Xiong
Matias Pollmann-Larsen
Accenture Research Manager –
Managing Director –
Supply Chain & Operations,
Supply Chain & Operations,
Economic Modelling and Data Science
Sustainable Value Chain Lead
Rebecca Sternberg Marttila
Managing Director –
Operations,Sustainability
Saranya Hari
Principal Director – Operations,
Sustainable Value Chain
Josh Whitney
Managing Director – Sustainability,
Sustainable Value Chain North America
Thought you knew the Scope 3 issues in your supply chain? Think again. 2Foreword
With the climate clock ticking, reducing Scope 3companies have made little progress to dateo It enables chief supply chain officers and
emissions—those that are the result of activities from in dealing with Scope 3 emissions because procurement leaders to understand how to embed
assets not owned or controlled by the reporting they just don’t know where to find them.responsible procurement across the enterprise to
organization, but that the organization indirectly drive meaningful reductions in upstream Scope 3.
impacts in its value chain1—has become a top priority It’s vital for companies to be able to identify all
for companies around the world, especially thosethe sources of their upstream emissions because, o And it can uncover a wide range of opportunities
that have committed to net zero. It’s a tremendously Accenture research has found, most of these for companies to generate broader enterprise
difficult problem to solve, given the huge, complex emissions—nearly two-thirds—come from Tier 2 value beyond emissions reduction by creating
global supply chain networks that are the backbone suppliers (i.e., subcontractors) and beyond. more efficient, resilient, cost-effective and
of modern companies. Most large companies, forcustomer-centric supply chain networks.
example, don’t even know the suppliers beyond Visibility into the supplier base is key to putting
Tier 1, those they interact with directly—let alone have companies in the position to act: The challenge of reducing emissions is enormous,
any sort of influence or control over them.but not insurmountable. In this report, we explore
o It helps them make better-informed decisions how, with the right combination of visibility,
This lack of visibility means companies only know about how and where to allocate their resources to actions and collaboration, we can reach our
what they can see—which isn’t all that much. They deliver the greatest impact. That’s especially critical goals and put the planet on the road to a
can’t truly manage Scope 3 emissions beyond Tier 1 now, as companies need to accelerate their more-sustainable future.
suppliers and report them in a consistent, repeatableprogress if they’re to meet their ambitious
and auditable way. In fact, the vast majority of decarbonization goals.Kris TimmermansPeter Lacy
Lead – Supply Chain Lead – Sustainability Services
& Operations & Chief Responsibility Officer
Thought you knew the Scope 3 issues in your supply chain? Think again. 3Companies looking to decarbonize Scope 3
emissions are missing the mark.
While focusing their efforts onScopes 1, 2 and 3:
engaging Tier 1 suppliers, AccentureWhat’s the difference?
analysis reveals that most companies’Scope 1 emissions are direct greenhouse
carbon intensity hot spots lie(GHG) emissions that occur from sources that
beyond their Tier 1 suppliers, with are controlled or owned by an organization
intensity varying greatly depending (e.g., emissions associated with fuel
combustion in boilers, furnaces, vehicles).
on geographic location or network
complexity. Companies need to drive Scope 2 emissions are indirect GHG emissions
multi-tier emissions visibility and associated with the purchase of electricity,
steam, heat or cooling.
regional supplier engagement
strategies to create targeted impact at Scope 3 emissions are the result of activities
scale. This paper presents insights and from assets not owned or controlled by the
actions for companies to accelerate reporting organization, but that the organization
indirectly impacts in its value chain. Scope 3
the decarbonization of their emissions include all sources not within an
supply chains. organization’s Scope 1 and 2 boundary. The
Scope 3 emissions for one organization are the
Scope 1 and 2 emissions of another organization.
Source: Environmental Protection Agency (EPA),
Thought you knew the Scope 3 issues in your supply chain? Think again. United States 4
Introduction
The United Nations Global Compact (UNGC) CEO of companies are tracking at least some elements attraction, lowering the cost of capital, mitigating
study done in collaboration with Accenture says of Scope 3 emissions. Of that small group, only regulatory disruption, improving resilience and
the supply chain is the key to winning the battle9 percent are achieving their emissions target. mitigating risk.
against climate change. That’s because supply Chief supply chain officers must still balance what
chains are the biggest contributor to the problem— can often be conflicting priorities—cost, quality,Generating such benefits starts with gaining real
they generate up to 60 percent of global emissions.2 service and now, sustainability. And in that equation, visibility into Scope 3 emissions—particularly those
sustainability often takes a back seat. Accordingcoming from upstream suppliers. This, in turn,
Chief executive officers (CEOs) recognize the to a recent Accenture survey,5 just 22 percent requires companies to truly understand all the
challenge. Of the global 2000 (G2000) companies,of procurement leaders see sustainability as a sources of their upstream emissions—across every
34 percent have set an ambitious net zero targettop 3 priority. tier of their supplier base—and the differences in
in line with climate science. Many companiesthose sources at the supplying industry and
have committed to net zero operations by 2040, Clearly, companies need to do more to address country levels. These insights are the prerequisites
or possibly earlier.3 Many companies are alreadyemissions to achieve their decarbonization goals. But to subsequently taking action to reduce
committed to powering their operations withit’s not just about carbon. A focus on eliminatingScope 3 emissions.
renewables. So, the big priority is now shiftingScope 3 emissions is critical because it can bring
to efficiently measuring and reducingvalue beyond emissions. Depending on their sector,
Scope 3 emissionspanies are linking sustainability outcomes to
their enterprise value creation agenda. This includes
Yet CEOs’ intentions haven’t translated into significant accessing premium customer segments, expanding
actions. According to a CDP survey,4 only 10 percent market access, improving talent retenti