Navigating the Complexities of Supply Chain Carbon Reporting

In an exciting development for the built environment sector in the UK, the Supply Chain Sustainability School delivered by Action Sustainability developed the Carbon Calculator, a digital solution designed to help businesses measure and report emissions from their supply chains. This collaboration is a crucial step towards tackling Scope 3 emissions in the sector and reducing impacts beyond direct operations.

An exciting aspect of this project is the opportunity for companies to access this platform and the wider support from Action Sustainability to embark their supply chains in this decarbonisation journey.

Rising climate regulation

It is clear that regulatory drivers are increasing and companies are being pressured to improve their climate disclosures. Carbon reporting is quickly becoming a top priority for organisations across the world. Greater global regulations, such as the Corporate Sustainability Reporting Directive (CSRD) in Europe or the EU’s Sustainable Finance Disclosure Regulation (SFDR), are widening in scope and coverage, requiring Scope 3 disclosures for companies that meet certain criteria.

How are businesses preparing for incoming regulation?

This requirement for more ambitious reporting requires first and foremost that businesses identify material categories within Scope 3; and that they set specific reduction targets aligned with climate science. Furthermore, given that a large proportion of Scope 3 emissions come from the products and services they buy from their suppliers, it is fundamental to rethink how they can collaborate with their supply chains.

Challenges and opportunities with Scope 3 reporting

Climate reporting is usually a manual and complex exercise for companies. In a recent survey, 71% of participants indicated that they store their Scopes 1 and 2 data manually, generally through Excel spreadsheets. This decreases significantly as they expand their coverage, suggesting that as their organisations become more experienced in their carbon reporting (e.g. Scope 3), they are more likely to transition away from storing data manually to using more sophisticated platforms. In fact, the use of technology solutions, such as the Carbon Calculator, can significantly reduce the burden of scope 3 reporting by automating data collection from multiple suppliers and aggregating it in one single place.

Collecting information from suppliers and integrating it into Scope 3 reporting is not an easy task. It requires time, resources and an efficient data management system – but perhaps most importantly, it requires closer collaboration with suppliers and a deep understanding of their main barriers to achieve decarbonisation. 

Where does a supplier even start?

Once organisations start mandating climate disclosures within their supply chains, the effect on both large and small suppliers will become significant, making it essential for them to improve on their abilities to report emissions. The carbon calculator is an ideal tool for suppliers who are looking for a simple and efficient platform to report their emissions, and that enables data sharing across organisations.

One of the main barriers faced by businesses is the lack of standardisation of the data required. It is not uncommon to hear that they spend lots of time and resources trying to adapt to different reporting requirements for different clients, which is not an optimal approach. As data requirements from clients increase, so does the reporting fatigue. This highlights that there is an urgent need for simplifying the disclosure process for suppliers.

The Carbon Calculator was designed with this in mind. It streamlines climate reporting, capturing consistent data across the built-environment sector which will be crucial to inform our decarbonisation plans. 

Finally, through this industry-wide collaboration, suppliers will have the opportunity to join the award-winning Supply Chain Sustainability School, to enhance their climate knowledge with virtual training sessions and e-learning resources,  ensuring they are equipped with the tools and knowledge to become more sustainable businesses.

For more information or to explore how Action Sustainability can support your organisation, please contact our team.