What is 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.
Why it matters
Most of a company's emissions sit within its value chain rather than its direct operations. Mapping your value chain helps identify where the biggest emission hotspots are and where reduction efforts will have the greatest impact.
Example
A furniture retailer maps its value chain and finds that timber sourcing and overseas shipping account for 70% of total emissions. This leads to a decision to source more timber from UK-managed forests.
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.
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.
Put your knowledge into practice
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