Supply Chain Factsheet

Supply Chain fact sheet

Suppliers play a pivotal role in any climate action plan

Large enterprises have global supply chains that stretch across the world and involve thousands of suppliers of various sizes and capabilities. While some are more mature in regards to their sustainability journey, many more have barely started.

Companies have a shared responsibility to manage these emissions and can only do if they can effectively engage their suppliers on the topics of sustainability, data sharing, product carbon footprinting and joint decarbonisation plans.

Not segmenting by emissions materiality and intensity

Focusing on just the largest suppliers by size of spend may miss opportunities to target the material hotspots that are common across suppliers, big and small.

Supplier education and training

Suppliers are unlikely to have the sustainability knowledge to understand what to do, how to get the product emissions data being requested, nor be motivated to do so quickly.

Data sharing concerns

Suppliers may be hesitant to share data for fear of put themselves at a disadvantage commercially, or to prevent their secret recipes and processes from being revealed.

Gather data efficiently

To increase accuracy of Scope 3 emissions data with the addition of supplier, site, or product specific primary data.

Verify hotspots

To enhance transparency of emissions drivers, supply chain risks and decarbonisation opportunities.

Align goals and actions

To create common goals and shared capability to action decarbonisation and track progress.

Supplier Engagement Starter Pack

Gain product level emissions data on the SKUs you procure from suppliers.

If you are a manufacturer, distributor or retailer looking to engage suppliers to improve the accuracy of your Scope 3 emissions estimates, Terrascope can help.

How does Terrascope approach supplier data?

Terrascope aims to improve the efficiency of collecting and validating data from suppliers by providing an innovative workflow. Rather than starting with a blank data template, suppliers see an emissions estimate for a product that they sell, broken down into the material emissions categories. Suppliers are guided to review the estimates and update it with any relevant additional data that they have.

Depending on the availability of data, companies can get started with estimates and work their way to data excellence by replacing it with activity, usage and site specific data.

Why is primary data gathering from suppliers important?

Every organisation faces a significant challenge to improve the accuracy of their supply chain emissions estimates. Supplier engagement helps companies gain more visibility into where emissions are generated in their supply chain, by gathering primary data in a structured and scalable process.

By working closely with suppliers, companies can encourage the adoption of standardised methods for data collection, ensuring the consistency and reliability of the emissions data reported.

How can sharing product level emissions data benefit suppliers?

1. Fulfil buyer requirements
Meet contractual obligations for sustainability reporting to buyers of your products. Gain preferential contractual terms, such as longer term contracts or shorter payment terms. The consequences of not participating could be potential loss of business with your customers

2. Build internal capacity on GHG accounting
Learn the ropes on GHG accounting and reporting, which is increasingly becoming mandatory from more buyers, regulators and inventors. Reduce administrative burden in the long run by starting building capacity now

3. Save cost while reducing emissions
Gain insights into your emission hotspots and decarbonisation opportunities. Reduce operational costs in the long run by improving efficiency or reducing waste, all while reducing emissions. Capture new market opportunities with lower carbon offerings

How can enterprises start to drive emissions reductions in their supply chains?

Measuring is the first step of a multi-year journey to reduce emissions. And it is critical to think of suppliers as allies in any supply chain decarbonisation effort.

Here are some suggested steps to building a joint action plan together with your suppliers after the data collection and emissions measure phase is completed

1. Setting supply chain emissions reduction goals

2. Providing training and technical support to suppliers

3. Sharing best practices

4. Integrating sustainability into supplier codes of conduct

5. Incorporating carbon reduction targets in the procurement of goods and services from suppliers.