Decarbonization Demystified – How to Become a Decarbonization Role Model

Reducing scope 3 emissions is crucial if companies want to reduce their climate impact and become decarbonization role models. 🤲🌎

Decarbonizing supply chains can dramatically reduce the environmental impact of any business. And of the three scopes of a company’s GHG (greenhouse gas) emissions, Scope 3 emissions matter the most, given it's where 80-90% of polluting emissions are generated.

On the necessary journey towards a net zero economy, we're excited to see certain companies taking the lead and becoming decarbonization role models. These role models are companies that not only comply with the challenging GHG Protocol targets for scopes 1 and 2 but go a step further by tackling their scope 3 targets, mobilizing clients and customers to track carbon emissions along the supply chain.


Paths to Decarbonization

Companies tend to follow two types of paths to achieve their GHG targets and decarbonization goals:

  • Bold and ambitious: an innovative CEO creates a proactive strategy and mobilizes their teams to get there.
  • Cautious and slow: after investing much time and carefully building a strategy, these companies avoid overcommitting to too many concrete, deliverable goals.

Although there isn’t a right or wrong path, a more balanced approach might lie between the examples above. 


Why Become a Decarbonization Role Model

As consumer preferences shift towards 'greener' products and services, regulations become stricter, and polluting emissions become more expensive, companies are beginning to prioritize corporate sustainability and decarbonization more than ever before. But it's not the only driving force behind this trend – sustainability in procurement and a green supply chain can also have benefits that help the bottomline, according to Ecovadis Sustainable Procurement Barometer (2019)

Becoming a role model in decarbonization requires a detailed view of the environmental, social, and economic impacts over a product or service’s life cycle. It requires innovation, industry leadership, high-quality data, sometimes even rethinking the entire business model.

And it is possible.



Developing More Sustainable Supply Chains

Time and time again, the supply chain has been proven to hold the key to significantly reducing GHG emissions. In early 2021, the World Economic Forum published a report in collaboration with Boston Consulting Group titled The Net Zero Challenge: The Supply Chain Opportunity. The report states that “eight supply chains account for more than 50% of global emissions”, and highlights supplier engagement as one of nine supply-chain initiatives chief executive officers should push for at their companies.

The report also outlines the share of scope 3 emissions for businesses’ overall total emissions across various industries: 

  • Up to 90% in the fast-moving consumer goods (FMCG) sector, including packaged foods, beverages, toiletries, candies, cosmetics, over-the-counter drugs, and dry goods
  • Up to 61% in the chemical and textile sectors
  • Up to 77% for electronics
  • And up to 85% for the fashion sector


Follow Clear, Science-Based Standards

Despite this explosive growth of net zero as a topic, the definition of the term itself and the path to get achieve this goal has broad and inconsistent interpretations. Standards like ISO 14040/44 (Life Cycle Assessment) and the ISO 14067 (CO2 footprint), provide a good starting point for methodology but targets aiming for net zero often differ greatly when considering what emissions  sources to include, the extent to which emissions should be reduced, and the timeframe of the target. 

Earlier this year, the Science Based Targets Initiative created the Corporate Net-Zero Standard – a framework for corporate net-zero target setting in line with climate science. The standard is a starting point in creating consistency for corporates and includes guidance, criteria, and recommendations that companies need to set science-based net-zero targets that help to:

  • Set near-term science-based targets for target achievements required in the next 5-10 years
  • Set long-term science-based targets for target achievements required by 2050
  • Create a strategy for neutralizing residual emissions
  • Looking at additional investments beyond value chain reductions

Effective Transparency Needs the Right Tools

Starting a decarbonization journey is daunting, but technology is here to help – allowing businesses to improve their carbon transparency and take control of their emissions for the bottom line.

carbmee's Environmental Intelligence System is a carbon footprint analytics platform with AI and automation, helping businesses to:

  • integrate customized LCA models;
  • find carbon reduction opportunities;
  • track breakdown beyond spend analytics, down to material, transport, and transaction levels;
  • integrate supplier's product carbon footprint seamlessly with Climate Expert Support;
  • and identify the highest emitters of CO2.

As we rush ahead to 2030, and later onto 2050, the time to act is now and there are more resources available to guide companies than ever before. A net-zero future is achievable: together.


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