Scope 3 Emissions: A Critical Challenge

Windmills seen on a hill from a distance set against a cloudy sky.

Scope 3 emissions, primarily those originating from supply chains, account for approximately three-quarters of total organizational emissions. As businesses strive to achieve net zero, addressing Scope 3 emissions has become a crucial challenge. The Scope 3 Maturity Benchmark, launched in March 2023, is a significant facilitator in this endeavor, highlighting the actions businesses are taking to expedite progress collectively.

Benchmark Contributors and Their Influence

Over the past year, more than 170 companies, boasting combined revenues exceeding $2.7 trillion (akin to the world’s 8th largest economy by GDP), have contributed to the Benchmark by sharing their experiences. This group, which influences over three million suppliers globally, has utilized this information to track their progress and identify their next key actions, thereby providing a roadmap for other organizations wishing to do the same.

Key Insights from the Benchmark

Strong Executive Buy-In and Corporate Communication

Nearly half (47%) of the group have set 2030 targets, with the highest maturity levels observed in Target Setting, Executive Buy-In, and Communications.

Gap Between Ambition and Investment

Despite high ambitions, there is a lack of corresponding investment in critical areas such as talent, policy, process, and supplier management, which are essential for progress.

Lack of Significant Investment in Procurement Teams

There is no substantial investment in procurement teams in terms of money or resources. Chief Procurement Officers (CPOs) are resorting to creative solutions, including upskilling their teams, due to the lack of funding for new resources and solutions.

Concerns Over Meeting Targets

With 80% of emissions stemming from Scope 3, there is a concern that there may only be 1-2 sourcing cycles left for some critical supply areas to align ambition with practical action. This poses a significant risk of widespread failure to meet targets as organizational learning struggles to keep pace with corporate goals.