Worldwide, companies have set emissions reduction goals to address climate change, preserve the environment, support community health, and reduce waste. And while many organizations may recognize that their environmental impact goes beyond their own smokestacks and tailpipes, they’re often missing the right data to illustrate the impact of those emissions and identify the best avenue to abate it.
How can organizations obtain reliable data to measure and reduce emissions throughout their supply chains? The first step involves knowing what to measure.
What are EPA Scope 1, 2, and 3 greenhouse gas (GHG) emissions? The Environmental Protection Agency’s (EPA) Center for Corporate Climate Leadership recognizes three categories of GHG emissions that can help companies understand and audit their impact:
Scope 3 relies on the data and information provided by a multitude of vendors and partners, making it the most challenging category to address, which is also why focus on that category has lagged the attention that Scope 1 and 2 have historically received. It also represents the largest category of emissions for most organizations, and companies that hope to achieve meaningful goals in the next decade will need to examine their entire supply chain. Mastering Scope 3 emissions will require more detailed datasets to gain a better understanding of all of their partners’ footprints.
Transportation is an excellent example of an area within Scope 3 emissions that has the potential to deliver a significant impact. The transportation sector produces the largest percentage of CO2 emissions from energy consumption in the U.S., according to the U.S. Energy Information Administration. That collective impact includes hundreds of thousands of disparate trucking companies that work with some of the world’s largest brands.
Where are the emissions challenges in supply chains and transportation? The primary challenge posed by Scope 3 emissions involves understanding a company’s unique network of partners and getting its emissions data, such as a shipper’s carrier network.
But organizations can’t improve what they can’t track, and many transportation professionals will share their struggle in organizing vast datasets across hundreds of partners.
In the past, carriers were measured primarily by service — getting goods to market in a timely fashion — and managing costs. Emissions might have been measured once annually and sent off to the sustainability team or to a consultancy. A single company’s data might be housed across multiple disconnected systems, making it difficult to collect and analyze. Consultants would typically be asked to enhance a specific function at a particular facility, but rarely to wrap their arms around the entire picture. There’s been little effort to standardize assessment across the supply chain and across organizations, making emissions difficult to compare or improve.
How can shippers track GHG emissions from their supply chains? Resources are available to help companies measure and reduce Scope 3 emissions. For those that want to get started on their own, the Greenhouse Gas Protocol recommends the following basic process.
The Greenhouse Gas Protocol outlines a set of simple steps for organizations to start out on their own: research their information, understand who their partners are, collect data from those partners, and identify who and where improvements can be made.
While this list is clear and succinct, it’s often easier said than done. Best practice to eliminate tenuous manual data aggregation across dozens of teams and over the course of many months would be to identify the partners existing in your network that aggregated and already analyze your consumption and emissions data.
As an alternative, an energy and transportation strategy service can analyze supply chain data and recommend solutions that optimize shipping and reduce climate impact.
How soon will shippers need to focus on GHG Scope 3 audits? The keys to making this process work are: get your transportation team involved in the strategy development, and seek out collaborative datasets.
Climate commitments and greenhouse gas targets are growing across shippers, motor carriers, railways, and major energy companies alike. Collaboration with transportation and energy partners will strengthen Scope 3 audits throughout the commercial sector and provide better data for emissions management. Every industry will benefit as more pieces of the supply chain align to create fewer GHG emissions.
Transportation and supply chain leaders are clearly aware of the objective, even if unsure about how to achieve it. Fortunately, there are resources available to help companies define their network, calculate their current emissions impact, and optimize their transportation choices. Forward-looking leaders will seek partners based in part on their shared commitment to climate goals. The winners will be those that have the right values — and the data to back them up.
Brett Wetzel is senior director of applied knowledge with Breakthrough.
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