Brandon Owens, vice president sustainability with Insight Sourcing Group, describes the challenge of meeting environmental, social and governance (ESG) requirements in global supply chains, especially with regard to measuring the carbon emissions of independent vendors and suppliers.
For companies looking to assess the carbon emissions of their external supply chain partners, the biggest challenge is data transparency, Owens says. “Organizations are at different stages of the sustainability journey.”
Some have made “incredible gains” in measuring Scope 3 emissions, he adds, but calculating suppliers’ carbon footprint remains a complicated task.
Scope 2 emissions pertain to energy purchases. Owens says there are multiple options out there for procuring renewable energy. Many utilities offer “green” pricing programs, and virtual power purchase agreements provide access to renewables from a wide range of sources. In addition, platforms for connecting buyers and sellers of renewable energy are becoming increasingly popular.
There’s no lack of renewable energy globally. “It’s the fastest-growing source of electricity in the world,” Owens says. “It’s outpaced fossil fuels over the last several years.” Solar and wind power make up two-thirds of new capacity coming on line, but conventional hydroelectric, geothermal and biopower are also in the mix.
The data for validating a supplier’s carbon footprint comes from a variety of places. Some is provided directly by the supplier, but it needs to be supplemented by external sources and be subject to calculations that produce an accurate assessment. In addition, Owens says, companies need to employ a platform that incorporates carbon into the sourcing decision along with cost.
The effort to achieve carbon neutrality and net-zero emissions must be built into the culture of the organization and be embraced by all employees, Owens says. “It’s not just something you can do on the side.”
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