Glossary
Supply chain emissions
"Supply chain emissions" refer to the greenhouse gas (GHG) emissions released into the atmosphere throughout all stages of a product or service life cycle. These stages encompass the acquisition of raw materials, design, production, transportation, storage, sale, usage, and disposal.
Understanding the concept of supply chain emissions necessitates a thorough comprehension of the overall life cycle of a product or service, as each stage contributes to the total carbon footprint. Notably, manufacturers have direct control over specific emission sources, such as the energy consumed during the production process. However, other sources, such as those associated with raw materials extraction or product usage, are steered by external parties, making the measurement and control of emissions more challenging.
Supply chain emissions are categorized into three distinct “scopes” as per the GHG Protocol, a widely used international standard for understanding, quantifying, and managing greenhouse gas emissions. Scope 1 emissions originate from sources owned or controlled by the organization, like company vehicles or factories. Scope 2 emissions stem from the generation of purchased electricity, steam, heating, and cooling consumed by the reporting company. Supply chain emissions fall predominantly under Scope 3, encompassing all other indirect emissions that occur across the value chain. This includes emissions from procured goods and services, business travel, waste disposal, and transportation and distribution of products in vehicles not owned or controlled by the company, among others.
Addressing supply chain emissions is a critical aspect of sustainable business practices and environmental responsibility initiatives. Many companies are now focusing on their climate impact beyond their operational boundaries. Noteworthy measures include adopting renewable energy, improving energy efficiency, and working with suppliers to implement greener strategies. A truly comprehensive and accurate measurement of a company’s carbon footprint demands understanding the GHG emissions produced and handled across its supply chain. Despite the complexities and challenges tied to assembling this data, efforts in minimizing supply chain emissions contribute significantly to climate change mitigation.