Kristin Burnham, MIT Sloan Management, December 18, 2024
Indirect emissions that occur along a company’s value chain account for 75% of the organization’s overall emissions, on average. They remain difficult to track.
Sustainability remains one of the most important factors that affect the way companies operate in industries across the globe. However, organizations are still facing challenges with key sustainability actions such as measuring emissions, according to a new report from the MIT Center for Transportation & Logistics and the Council of Supply Chain Management Professionals.
Scope 3 emissions, which include indirect emissions that occur along a company’s value chain but are not directly controlled by the organization, account for 75% of a company’s overall emissions, on average. Yet organizations struggle to track these emissions due to the intricate web of supplier and customer relationships and their extended business work streams, according to the “State of Supply Chain Sustainability 2024” report. The report is based on a survey of supply chain professionals in different industries and business functions, with more than 7,000 responses from people in 80 countries.
Here are five takeaways from the report about the challenges posed by Scope 3 emissions and steps being taken to address them.
Accurate emissions accounting is paramount
Organizations that want to identify where they can reduce greenhouse gas emissions need to understand and monitor their carbon footprints. This requires that they rethink and update their emissions accounting.
While companies have grown adept at calculating Scope 1 and Scope 2 emissions, calculating Scope 3 emissions remains problematic due to the complex web of supplier relationships and their extended business activities, the researchers found. Current emissions calculations are inflexible and prone to error, rendering them inaccurate.
