Companies Can Improve Sustainability by Finding Carbon Emissions Hot Spots Across Their Supply Chains, Accenture Report Shows
08 Dezembro 2022 - 9:59AM
Business Wire
Data model mapping relationships between
industries and countries provides better visibility in complex
supply chain networks, enabling more effective strategies to
significantly reduce Scope 3 emissions by 2050
Companies need full visibility across their supplier base in
order to make significant progress on net zero targets by 2050.
However, that visibility is challenged by the fact that nearly
two-thirds of upstream Scope 3[1] emissions in supply chains come
from suppliers that companies don’t deal with directly, according
to a new report by Accenture (NYSE: ACN).
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Companies need full visibility across
their supplier base in order to make significant progress on net
zero targets by 2050, says Accenture. (Graphic: Business Wire)
The Thought you knew the Scope 3 issues in your supply chain?
Think again. report examines carbon intensive “hot spots” in
supply chains across supplier tiers, identifying where greenhouse
gas (GHG) emissions are significantly higher and potentially more
difficult to reduce. For the report, Accenture developed a data
model that uses industry- and country-level trade and emissions
data to calculate the Scope 3 contribution of suppliers to their
customers and create an accurate picture of the location and size
of upstream GHG emissions.
“Scope 3 emissions are elusive and difficult to track in today’s
complex supply chains. Many large companies don’t even know the
suppliers beyond Tier 1, let alone have any sort of influence or
control over them or their sustainability practices, which is why
we have seen little progress in reductions to date,” said Kris
Timmermans, Accenture’s Supply Chain lead. “Armed with the
knowledge of where their emissions sit, companies can do the really
important thing – commit to taking action and collaboration with
the entire supplier base and all stakeholders, toward a more
sustainable future.”
The model Accenture created can show upstream emissions by
country, industry and supplier tier – for example in German
automaking revealing beyond the known suppliers in Germany and
China to those buried deeper in supply networks from other
countries like Poland and South Africa. The model also compares
upstream Scope 3 emissions with Scope 1, finding wide variation
across industries — for example, the high tech industry’s upstream
Scope 3 emissions are 28 times as large as its Scope 1 emissions,
compared with the utilities sector, where upstream Scope 3 is only
one-fifth the size of its Scope 1 emissions.
Accenture’s analysis reveals that in most cases, if upstream
emissions are a significant portion of a company’s total emissions,
they tend to occur deeper in the supplier network. For example,
upstream Scope 3 emissions for the aerospace and defense industry
is many times the size of its Scope 1 and 2 emissions, and these
upstream emissions are buried deep in its upstream supplier network
– only 20% of its emissions come from its Tier 1 suppliers.
“Our recent research shows that only 7% of companies are on
track to reach their net zero commitments, revealing that for the
other 93% of businesses, the time to act is now,” said Peter Lacy,
Accenture’s Sustainability Services lead and chief responsibility
officer. “Even amid economic volatility, ambitions around
sustainability are on the rise, however tapping into carbon
intelligence is an important piece of the puzzle in converting
those ambitions into action and impact. Tomorrow's leaders are
collaborating today to enable circularity and increase sustainable
outcomes across the value chain.”
With increased visibility into upstream Scope 3 emissions and
carbon intelligence embedded into the core business, companies can
make better-informed decisions about how and where to allocate
resources; ensure responsible procurement throughout the
organization to drive meaningful reductions; and uncover broader
enterprise value by creating more efficient, resilient,
cost-effective and customer-centric supply chain networks. The
report recommends five key actions that all companies can take now
to achieve that visibility:
- Conduct a real multi-tier emissions hot spot analysis to set
targets and drive the right actions. The insights from such an
analysis provide the foundation for an action plan to address the
areas of most significant impact.
- Embed sustainability into category planning and supplier
selection. Depending on the hot spot areas identified, a
company can customize category plans, including emission-reduction
strategies, to address hot spots as appropriate.
- Integrate emissions into the supply chain control tower and
implement a digital twin. Control towers that centralize
visibility and decision making and guiding actions with short- and
long-term benefits combined with a digital twin of the supply chain
generates the end-to-end visibility necessary to optimize supply
chain networks across service, costs, quality, and sustainability —
in real time.
- Support suppliers in their ongoing decarbonization
efforts. Segmenting the supplier base can help companies tailor
their engagement programs appropriately, as long as they’re also
improving supplier data quality.
- Collaborate across sectors, with peers, suppliers and
ecosystem partners to speed up decarbonization at scale. An
intelligent platform solution to aggregate data from multiple
parties and make recommendations on the most effective steps
towards decarbonization is critical.
You can explore Thought you knew the Scope 3 issues in your
supply chain? Think again. report in Accenture Foresight,
our new thought leadership app, which provides a personalized feed
of all our latest reports, case studies, blogs, interactive data
charts, podcasts and more. Visit:
http://www.accenture.com/foresight.
About the Research Accenture Research built a data model
to approximate upstream greenhouse gas emissions of different
industries using a time series of environmentally extended
multi-regional input‐output tables. The dataset includes 163
industries and 49 geographic areas (44 countries and 5 rest of
world regions).
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[1] Scope 1 emissions are direct greenhouse (GHG) emissions that
occur from sources that are controlled or owned by an organization
(e.g., emissions associated with fuel combustion in boilers,
furnaces, vehicles). Scope 2 emissions are indirect GHG emissions
associated with the purchase of electricity, steam, heat, or
cooling. Scope 3 emissions are the result of activities from assets
not owned or controlled by the reporting organization, but that the
organization indirectly impacts in its value chain. Scope 3
emissions include all sources not within an organization’s scope 1
and 2 boundary. The scope 3 emissions for one organization are the
scope 1 and 2 emissions of another organization. Source:
Environmental Protection Agency (EPA), United States
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Alexander Aizenberg Accenture +1 917 452 9878
alexander.aizenberg@accenture.com
Accenture (NYSE:ACN)
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