Curbing carbon emissions in company value chains

Most of the world’s largest companies account and report on emissions from their direct operations, but there is still a significant gap in accounting for emissions along their value chain. These are called Scope 3 emissions and often represent the biggest share of a company’s greenhouse gas impacts, in some cases up to 70 per cent. Methods to curb them was a central topic of debate at this year’s Climate Innovation Summit in Dublin.

Interventions on company greenhouse gas emissions have widely become embedded into corporate practices by addressing emissions related directly to their operations and energy use. This is called Scope 1 and Scope 2 emissions. However, consulting firms aside, most major companies have the largest share of emissions embedded in their value chains. This encompasses emissions not directly associated with its operational activities, for instance, purchased goods and services, waste generation, investments and choice of technologies. These areas are collectively defined as Scope 3 emissions and finding methods of intervention poses a significant challenge for companies.

Many businesses lose oversight when they move beyond their first tier of suppliers and they find it difficult to compare one supply chain with the other – and hence very difficult to calculate the associated environmental impact. Being unable to measure and quantify their emissions hinders their ability to set targets as they do not have a baseline to compare them against.

As described by Owen Hewlett, Chief Technical Officer, Gold Standard: “Scope 3 has been the forgotten man of climate accounting.” This is despite the fact that value chain emissions account for up to 70 per cent of a company’s greenhouse gas emissions.

Finding means of intervention was precisely the focus of the breakout session at this year’s Climate Innovation Summit in Dublin. “It’s a vast amount of emissions that we are talking about, which provides a vast amount of opportunity,” Hewlett continued.

A lot can be done to incentivise companies to work more broadly with their supply chain. By investigating best practice interventions from successful case studies on Scope 3 reporting, five main themes were identified as viable pathways to curb emissions in company value chains:

  • Supplier engagement/procurement: Using the power of procurement to change the actions of company suppliers. For example, CDP works with key suppliers to help them set targets and monitor emissions over time. This has saved approximately 150 million tonnes of CO2 in the upstream supply chain of their suppliers.
  • Product service design: Design choices ultimately determine the product’s lifecycle emissions, which is based on the choice of materials used for their products. Designing products with longer lifespans and more sustainable materials can help offset emissions in value chains.
  • Operational practices: This is an internal perspective for the company, which includes biking to work in terms of employee commuting and using teleconferences to offset emissions from business travel.
  • Business model innovation: Enforcing business models that move away from evermore production and realigning incentives between producers and consumers that move away from more and more consumption.
  • Customer engagement: Affecting the way that customers actually use their products. This includes nudging and gamification as a means to influence customers in order to make them use their products more efficiently.

Areas of significant impact include accounting for land use change in corporate supply chains and deforestation related commodities which have high risk and impact. In an EIT Climate-KIC context, current projects for Scope 3 reporting with our partners include:

  • Gold Standard: The ‘Value Chains Interventions Guidance’, which is focused on Soil Organic Carbon Reporting.
  • Quantis: A commodity monitoring tool that determines the spatially-sensitive geo-footprint of mayor commodities by converging Life Cycle Assessment datasets with spatial data from Geographic Information Systems.
  • Quantis: A Redchain project that aims to reduce inconsistencies and improve transparency for REDD+ projects using a blockchain solution. 

With the carbon costs of travel in mind, Climate Innovation Summit session summaries are available online for those who cannot attend—and for review for those present. These summaries aim to extract the key debates, dialogues, and learnings from each #MissionFinance session.

 
Location
Ireland
Related Goal
Goal 8: Reduce industry emissions
Articles you may be interested in
In The News
Brill Power’s new innovation radically increases battery life and storag...

Brill Power, supported by EIT Climate-KIC, has launched the...

Brill Power’s new innovation radically increases battery life and storage capacity
In The News
EIT Climate-KIC CEO Dr. Kirsten Dunlop gives TEDx Talk

EIT Climate-KIC CEO Dr. Kirsten Dunlop delivered a talk,...

EIT Climate-KIC CEO Dr. Kirsten Dunlop gives TEDx Talk
In The News
Putting theory into practice: EIT Climate-KIC Pioneer innovating the Greek mar...

To tackle complex climate challenges, we need a broader...

Putting theory into practice: EIT Climate-KIC Pioneer innovating the Greek maritime sector
In The News
EIT launches call for proposals to boost innovation in Higher Education Instit...

Unlocking the potential of higher education institutions for innovation...

EIT launches call for proposals to boost innovation in Higher Education Institutions
In The News
Dolomites forging climate resilience

The Italian Dolomites, a UNESCO World Heritage Site, are...

Dolomites forging climate resilience
In The News
People-powered resilience: Andalusia announces new climate action plan

The region’s climate action plan has been announced, with...

People-powered resilience: Andalusia announces new climate action plan
In The News
Built by Nature: new initiative to accelerate the transition to sustainable co...

The built environment accounts for close to 40 per...

Built by Nature: new initiative to accelerate the transition to sustainable construction in cities
In The News
The State of California and EIT Climate-KIC advance partnership for climate in...

Glasgow, 8 November – The California Governor’s Office of...

The State of California and EIT Climate-KIC advance partnership for climate innovation
In The News
COP26: UN Climate Change and EIT Climate-KIC partner to establish new Global I...

A new digital Global Innovation Hub has been launched at...

COP26: UN Climate Change and EIT Climate-KIC partner to establish new Global Innovation Hub
In The News
ClimateLaunchpad announces 2021 competition winners

EIT Climate-KIC’s ClimateLaunchpad – the world’s largest green business...

ClimateLaunchpad announces 2021 competition winners
In The News
EIT Cross-KIC New European Bauhaus launches Ideation – Deadline Extended

EIT Climate-KIC has launched a call for ideas on...

EIT Cross-KIC New European Bauhaus launches Ideation – Deadline Extended
In The News
Call for proposals: Scaling the New European Bauhaus Ventures

The European Institute of Innovation and Technology (EIT) has...

Call for proposals: Scaling the New European Bauhaus Ventures
In The News
Glasgow City Region in the race to resilience

Glasgow, which is hosting this year’s UN Climate Change...

Glasgow City Region in the race to resilience
In The News
Gipuzkoa’s quest for sustainability

Gipuzkoa, the smallest Spanish province located in the Basque...

Gipuzkoa’s quest for sustainability
In The News
EIT Climate-KIC to host week-long celebration of climate innovators

The EIT Climate-KIC Week of Action will celebrate, recognise...

EIT Climate-KIC to host week-long celebration of climate innovators
In The News
EIT Climate-KIC launches new series of circular economy courses

As companies and practitioners around the world are looking...

EIT Climate-KIC launches new series of circular economy courses
In The News
NetZeroCities: the new project leading European cities’ transition to net-ze...

Starting in October 2021, the new project NetZeroCities will...

NetZeroCities: the new project leading European cities’ transition to net-zero emissions by 2030
In The News
In the face of complex challenges, Europe stronger together, says EU President...

European Commission President Ursula von der Leyen outlined her...

In the face of complex challenges, Europe stronger together, says EU President von der Leyen
In The News
New IPCC report reveals urgent need for climate innovation

The IPCC’s Sixth Assessment Report has launched. The report...

New IPCC report reveals urgent need for climate innovation
In The News
Moving beyond ‘brown coal’ in Europe’s rural regions

Together with Partners, EIT Climate-KIC is leading a process...

Moving beyond ‘brown coal’ in Europe’s rural regions
In The News
EU’s “Fit for 55” to spur policy innovation for climate action

The European Commission has released its “Fit for 55”...

EU’s “Fit for 55” to spur policy innovation for climate action
In The News
Munich Re and ERGO invest in EIT Climate-KIC carbon removal programme

Major German corporate group sets the ambition to accelerate...

Munich Re and ERGO invest in EIT Climate-KIC carbon removal programme
In The News
23 pilot projects selected by EIT to unlock higher education’s innovation po...

The European Institute of Innovation and Technology (EIT) has...

23 pilot projects selected by EIT to unlock higher education’s innovation potential in Europe
In The News
Investing in start-ups scales the offering of climate adaptation solutions in ...

A partnership between EIT Climate-KIC and CDC Group, the...

Investing in start-ups scales the offering of climate adaptation solutions in African and South Asian countries
In The News
Irish Aid extends support for innovation and development from the ground up

The Government of Ireland’s development assistance programme, Irish Aid,...

Irish Aid extends support for innovation and development from the ground up
In The News
EIT Climate-KIC showcases climate innovation at R&I Days

EIT Climate-KIC participated in the European Commission’s Research and...

EIT Climate-KIC showcases climate innovation at R&I Days
In The News
Branch Magazine wins Ars Electronica Award for Digital Humanity

Branch Magazine, a collaboration between EIT Climate-KIC, Mozilla Foundation...

Branch Magazine wins Ars Electronica Award for Digital Humanity
In The News
Cross-KIC project to boost circular economy in Western Balkans

The circular economy concept is of crucial importance to...

Cross-KIC project to boost circular economy in Western Balkans
In The News
Exploring new horizons with Pioneers into Practice

Enrolment is now open for placement hosts and participants...

Exploring new horizons with Pioneers into Practice
In The News
Circular bioeconomy start-up receives €2 million from European Innovation Co...

EIT Climate-KIC supported Lixea (formerly Chrysalix Technologies) has received...

Circular bioeconomy start-up receives €2 million from European Innovation Council Fund