Bart De Muynck, chief industry officer of project44, discusses how companies can make real progress in measuring the carbon emissions of their supply chain partners.
The importance of environmental, social and governance (ESG) compliance has grown in recent years, but when it comes to measuring carbon emissions, many companies have focused on those designated as Scope 1 or 2, for which they are directly responsible. Less attention and effort have been paid to Scope 3 emissions, generated by supply chain partners, including transportation providers, over which the purchasing entity has no direct control.
Sixty-percent of all supply chain emissions are classified as Scope 3, De Muynck says. But many companies are failing to capture the data from those emissions, and “you can’t manage what you can’t see.”
“Greenwashing” — paying lip service to environmental responsibility while taking little action to actually fulfill it — is all too common. Few companies are truly on the journey to capture Scope 3 data, so that they can takes steps to curb those emissions.
“Just having the data isn’t enough,” De Muynck says. “You need to be able to represent it in a way that people can understand from a sustainability [perspective].”
When companies do act to capture the data, they often report it in the form of “assumptions and averages.” The result is an inaccurate measurement of real emissions, with extreme variance.
To tackle the Scope 3 problem, companies should begin by making it a focal point in their strategy, De Muynck says. Then they need to apply benchmarks against which they can measure performance — even though such numbers aren’t readily available across industries. Companies need to know “what good looks like,” he says, especially those with older truck fleets that emit higher levels of carbon dioxide and other greenhouse gases.
Where will those benchmarks come from? “I certainly hope government will have a say,” De Muynck says. “If you start charging carbon taxes, there should be a benchmark [for assessing them].”
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