What is Supply Chain Emissions?
Greenhouse gas emissions generated by suppliers in the production and delivery of goods and services. Supply chain emissions typically fall under Scope 3 and often represent the largest portion of a company's carbon footprint.
Why it matters
For most SMEs, supply chain emissions dwarf direct operational emissions. Understanding where supply chain hotspots lie is essential for credible Scope 3 reporting and for making sourcing decisions that genuinely reduce your footprint.
Example
A gift retailer analyses its supply chain emissions and finds that products imported from China account for 65% of total Scope 3. Switching 30% of product sourcing to UK manufacturers reduces reported supply chain emissions by 18%.
Related terms
Scope 3 Emissions
All other indirect emissions occurring in an organisation's value chain, both upstream and downstream. Scope 3 typically represents 70-90% of a company's total carbon footprint and includes emissions from suppliers, business travel, employee commuting, and product use.
Upstream Emissions
Scope 3 emissions that occur in the supply chain before a product or service reaches an organisation. This includes emissions from purchased goods and services, capital goods, fuel and energy activities, transportation, waste, business travel, and employee commuting.
Value Chain
The full range of activities needed to create a product or service, from raw material extraction through production, delivery, use, and end-of-life disposal. Understanding your value chain is essential for accurate Scope 3 emissions reporting.
Put your knowledge into practice
Start measuring your carbon footprint with EcoHedge. Connect your accounting software and get your first carbon report in hours.