Supply chain emissions, also known as scope 3 emissions, refer to the greenhouse gas emissions that occur across a company’s upstream and downstream value chain. These emissions often represent the majority of a company’s carbon footprint. Accurately calculating scope 3 emissions is crucial for setting science-based targets, choosing suppliers, and reducing impacts.
Key Steps for Calculating Supply Chain Emissions
The main steps for calculating supply chain emissions are:
- Map the supply chain – Identify major suppliers, materials, logistics, and services. Focus on the largest contributors first.
- Collect activity data – Gather procurement spend, weight purchased, units procured, or other metrics on volumes.
- Identify emissions factors – Find appropriate emissions factors for materials and services. Key sources are:
- EPA supply chain factors for US industries1
- Ecoinvent life cycle database
- Industry associations
- Supplier surveys
- Calculate emissions – Multiply activity data by emissions factors to estimate emissions for each supplier and category.
- Improve accuracy – Collect primary data from suppliers through surveys or product LCAs. Prioritize the largest contributors.
- Set reduction targets – Analyze results to find hot spots and set science-based targets to reduce emissions over time.
- Track progress – Update activity data annually and compare to baseline to track target progress.
Emissions Factors Data Sources
Some key emissions factors data sources are:
- EPA Supply Chain Factors – Provides cradle-to-gate factors for over 400 US industries based on EEIO modeling. Covers emissions from inputs, transport, and waste.
- Ecoinvent Database – Contains thousands of product and industry life cycle assessment profiles with emissions factors. Requires a license.
- Industry Associations – Groups like WBCSD provide industry average emissions factors for specific materials and products like cement, steel, aluminum.
- Supplier Surveys – Asking suppliers directly for emissions factors through questionnaires or scorecards.
Challenges and Limitations
Some key challenges with emissions factors include:
- Reliance on proxy data and industry averages due to limited supplier data
- Emissions estimates are not product or supplier specific
- Evolving accounting standards and platforms
- High effort required to survey small suppliers
- Legal and competitiveness concerns around data sharing
Ongoing collaboration across the value chain is needed to enable more accurate and transparent emissions accounting.
More Information: circulartree.com