Dive Brief:
- Forty-five percent of companies believe they are ready to report on their Scope 3 greenhouse emissions by 2024, according to a recent poll of leaders in IT and sustainable strategy conducted by Morning Consult for IT giant IBM.
- At the same time, just 38% said their businesses are currently measuring their Scope 3 footprints, per the report.
- While indirect emissions account for the vast majority of most companies’ carbon footprints, Scope 3 ranks relatively low among performance indicators firms use to measure sustainability. “Specific KPIs, notably supplier metrics, are likely being overlooked,” the report’s authors write.
Dive Insight:
IBM’s report is a reminder of how much work is yet to be done in tracking and reducing supply chains’ carbon footprint.
As new laws targeting supply chain transparency come online, both at the state-level in the U.S. and internationally, companies could face new requirements to disclose their Scope 3 emissions. Yet a 7 percentage point gap exists between those leaders who say they are ready to report on their Scope 3 emissions and those who are actually measuring them, according to the survey.
“There are some disparities between business leaders’ perceptions of their organizational capabilities versus what their organization is already doing,” the report authors write.
Scope 3 emissions cover everything from raw materials and third-party manufacturing to freight and a product’s end-of-life cycle. Its breadth, complexity and indirect nature make it a complicated challenge to unravel, much less solve.
Tesla called Scope 3 calculations “highly academic” when it provided figures for its indirect emissions for the first time ever this spring.
Even the high tech industry, with a reputation for being data savvy, is far behind on Scope 3. An Accenture analysis from earlier this year found that “many High Tech companies lack the deep visibility across the supply chain that’s required to address their upstream Scope 3 emissions.”
Luiz Amaral, CEO of Science Based Targets initiative, said earlier this year that companies often point to a lack of access to supplier data as a major challenge in tracking and reducing Scope 3 emissions — a common theme in Scope 3 discussions and one that is reflected in executive surveys.
“Getting a clearer picture of your supply chain emissions is a vital starting point for any science based target,” Amaral said in a webinar this summer. “One does not manage what one does not measure.”
When it comes to deploying information technology to track Scope 3 emissions and other sustainability issues, the top challenges listed were overall budget limits and overall budget allocation challenges, according to the IBM survey.
IBM, which has products that track Scope 3 emissions, tapped Morning Consult to perform the survey, which was conducted in August. It drew from a sample of 3,250 business leaders, defined for the survey as decision-makers in IT and sustainability strategy within their organizations, from 13 countries.
