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Supply Chain CO2 Emissions
Supply chain emissions refer to the greenhouse gas (GHG) emissions generated during the production, transportation, and distribution of goods and services, as well as the disposal of waste. These emissions are also known as "scope 3 emissions" and include the indirect emissions associated with a company's supply chain activities, such as the emissions from the production of raw materials, the manufacturing of products, and the transportation of goods.
The supply chain carbon footprint is a measure of the total amount of GHG emissions generated by a company's supply chain activities. This includes the emissions generated by the company's own operations (scope 1 and 2 emissions) as well as the emissions generated by its suppliers (scope 3 emissions).
Supply chain sustainability is the practice of managing the environmental, social, and economic impacts of a company's supply chain activities. It involves taking a holistic approach to supply chain management that considers the full life cycle of products, from raw materials extraction to end-of-life disposal.
Supply chain sustainability is important because it helps companies to identify and manage the risks and opportunities associated with their supply chain activities.
Scope 3 Emissions
Supply chain emissions scope 3 refer to indirect greenhouse gas (GHG) emissions that are generated from activities outside of a company's direct control, but which are linked to the company's operations. These emissions are often the largest source of GHG emissions for companies and can include emissions from the entire supply chain, from the extraction of raw materials to the end use and disposal of products.
There are 15 different scope 3 categories, which are defined by the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. Some examples of scope 3 emissions categories include:
- Category 1: Purchased goods and services - emissions from the production of goods and services purchased by a company.
- Category 2: Capital goods - emissions from the production of capital goods, such as buildings and equipment, that a company uses.
- Category 3: Fuel and energy-related activities - emissions from the production and consumption of purchased energy, such as electricity and heat.
- Category 4: Upstream transportation and distribution - emissions from the transportation and distribution of purchased goods and services.
- Other scope categories include: waste generation and disposal, business travel, employee commuting, and investments. Each category is broken down into several subcategories to provide detailed guidance for measuring and reporting scope 3 emissions.
Scope 3 emissions vary widely by industry and company, depending on factors such as the nature of the products and services provided, the geographic location of operations, and the complexity of the supply chain.
Here are some examples of scope 3 emissions:
- Emissions from purchased goods and services: For example, a clothing company's scope 3 emissions would include the emissions from growing the cotton, manufacturing the fabrics, and producing the clothing that they purchase from their suppliers.
- Emissions from fuel and energy-related activities: For example, a restaurant's scope 3 emissions would include the emissions from the production and transportation of the electricity and natural gas they purchase to power their equipment and facilities.
- Emissions from upstream transportation and distribution: For example, a consumer electronics company's scope 3 emissions would include the emissions from the transportation and distribution of the raw materials and components used to make their products, as well as the emissions from the transportation of their finished products to customers.
Supply Chain Carbon Accounting
Carbon accounting is the process of measuring and reporting the amount of greenhouse gas (GHG) emissions that are generated by an organization or activity. The goal of carbon accounting is to provide accurate and transparent information on emissions, which can be used to track progress towards emissions reduction targets, identify opportunities for emissions reductions, and communicate with stakeholders.
Carbon accounting methods typically involves the following steps:
- Identifying the sources of emissions: This includes identifying all of the direct and indirect sources of GHG emissions associated with an organization or activity. For example, a manufacturing company might identify emissions from their own production processes, as well as emissions from the production of the materials they use and the transportation of their products.
- Measuring emissions: Once the sources of emissions have been identified, the next step is to measure the amount of emissions associated with each source. This involves selecting appropriate emission factors, which are used to convert the activity data (e.g. fuel consumption, electricity use) into CO2 equivalent emissions.
- Reporting emissions: Once the emissions have been measured, they need to be reported in a standardized format that is widely recognized and accepted. This can include reporting to regulatory bodies, investors, or customers.
There are a number of carbon accounting standards and methods that can be used to guide the carbon accounting process. Some of the most widely used standards include:
- The Greenhouse Gas Protocol: This is a widely recognized standard for measuring and reporting GHG emissions. It includes standards for both corporate accounting and product and supply chain accounting.
- ISO 14064: This is an international standard for GHG accounting and verification. It provides a framework for organizations to quantify and report their GHG emissions.
- The Carbon Trust Standard: This is a certification scheme that recognizes organizations that have measured and reduced their carbon footprint.
Examples of carbon accounting include measuring the GHG emissions associated with a company's electricity consumption, or calculating the emissions associated with a product throughout its entire lifecycle, including the raw materials, production, use, and disposal phases.
The Supply Chain Carbon Footprint Reduction Strategy
The supply chain carbon footprint reduction strategy is a plan or approach adopted by companies to reduce the greenhouse gas (GHG) emissions associated with their supply chains. This involves identifying emissions hotspots, setting targets for emissions reduction, and implementing measures to reduce emissions across the entire supply chain.
Many companies have adopted new strategies, some examples of companies reducing carbon footprint are Apple and Walmart, which has set a target to reduce emissions from its global supply chain by 1 gigaton of CO2 equivalent by 2030. To achieve this goal, the company is working with suppliers to reduce emissions from manufacturing, transportation, and other activities.
A low-carbon supply chain is a supply chain that has been designed and managed to minimize the GHG emissions associated with its operations. This can include measures such as optimizing transportation routes to reduce emissions, using renewable energy sources, and implementing energy efficiency measures.
Carbon capture is a technology that involves capturing CO2 emissions from industrial processes and storing them underground. This technology can be used in the supply chain to capture emissions from manufacturing processes or transportation, which can help to reduce the overall carbon footprint of the supply chain.
In addition to the measures taken by individual companies, there are also industry-wide initiatives to reduce the carbon footprint in supply chain management. For example, the Science-Based Targets initiative is a collaborative effort between businesses and organizations to set targets for reducing emissions in line with the goals of the Paris Agreement.
Supply Chain Carbon Footprint Calculator
There are various carbon footprint and scope 3 emission calculators that can be used to calculate the carbon footprint of an organization's supply chain. Some examples include:
- Supply Chain Carbon Footprint Calculator - This tool is developed by the Carbon Trust and can be used to estimate the carbon footprint of an organization's supply chain.
- Emission Calculator - The EPA provides a range of emission calculators, including the Greenhouse Gas Equivalencies Calculator, which allows users to convert emissions from various sources into equivalent metrics.
- Carbon Footprint of Shipping - The International Maritime Organization provides a Carbon Intensity Indicator, which allows users to calculate the carbon footprint of shipping.
- Transport Carbon Calculator - The World Business Council for Sustainable Development provides a tool that can be used to calculate the carbon footprint of transport operations.
- Ferry Emissions Calculator - The Ferry Footprint Calculator is a tool developed by the European Union that can be used to calculate the carbon footprint of ferry transportation.
Decarbonizing Supply Chains
As a leading supply chain technology integrations platform, Chain.io recognizes the importance of decarbonizing the supply chain and achieving a green and net-zero logistics future. The importance of a green supply chain and net-zero logistics cannot be overstated, as it is a critical step towards achieving global climate goals and reducing the impact of greenhouse gas emissions across the supply chain.
By working towards a net-zero supply chain, companies can minimize the negative impact of their operations on the environment and society, while also improving the efficiency and resilience of their supply chains. Achieving a net-zero logistics system requires a comprehensive approach that encompasses all aspects of the supply chain, from transportation to manufacturing to distribution.
At Chain.io, we are committed to helping our customers reduce their carbon footprint in the supply chain and achieve a green and net-zero logistics system by giving them better visibility into their emissions data. Our platform provides a range of tools and solutions that can help logistics service providers and shippers integrate and monitor the flow of thei CO2 emissions data to reduce their greenhouse gas emissions across the supply chain.
By leveraging our platform and solutions, Chain.io can help our customers reduce their carbon footprint in the supply chain and achieve a more sustainable future.