It’s time for businesses to reduce value chain emissions

Sustainability

28. Jul 2022

value chain emissions

Aron Vallinder, PhD

Research Writer

Evan Farbstein Headshot

Evan Farbstein

Sustainability Writer

Reducing your business’s climate impact does more than fight climate change – it also helps you meet business objectives.

Aron Vallinder, PhD

Research Writer

Evan Farbstein Headshot

Evan Farbstein

Sustainability Writer

With value chain emissions accounting for around 90% of the average business’s carbon footprint, it’s plain to see how the climate benefits when businesses reduce those emissions.

But what some businesses may not know is that there are also significant opportunities to be seized by measuring and reducing value chain emissions. 

Below are three of those opportunities, explained.

Why reduce value chain carbon emissions?

Make meaningful progress on climate change

The latest IPCC report emphasizes that reaching net zero requires “coordinated action throughout value chains.”

Because around 90% of a company’s emissions are typically in the value chain (also called scope 3), value chain engagement can lead to a substantial reduction in total emissions.

Moreover, by encouraging your suppliers to reduce emissions, you’re also helping other companies that use those suppliers – creating knock-on decarbonization effects throughout the economy.

Stay ahead of regulations

Regulators are increasingly realizing the importance of requiring businesses to disclose carbon emissions, including in the value chain.

For example, the EU’s CSRD (Corporate Sustainability Reporting Directive) will come into effect on January 1, 2023, requiring many more companies to disclose environmental impacts such as emissions.

Similarly, the US SEC (Securities and Exchange Commission) has recently unveiled a regulation proposal that would require public companies to disclose emissions, including scope 3 emissions.

By starting to engage your value chain in carbon measurement and reduction today, you ensure that you stay compliant in the future.

It’s good business

Customers, employees, and investors are increasingly concerned with a company’s record on climate change. Appease them by making demonstrable and impactful reductions to your carbon footprint – and for most businesses, the biggest reductions to be found are in the value chain.

In addition to meeting increasing demand for sustainability, your business can also mitigate risk by taking climate action. Emission-intensive parts of your value chain face greater risk, whether from tightening regulation or rising cost of fossil fuel. Jump-starting your net zero journey by addressing your largest value chain emissions makes good financial sense.

Reducing value chain emissions for large enterprises: a practical guide.

Getting started

It can seem daunting to begin reducing value chain emissions, especially for lagre businesses with complicated value chains.

But your business doesn’t have to go on this journey alone. Book a demo with Normative to learn how we enable you to measure your full carbon footprint, identify hotspots, and engage with suppliers to reduce emissions.

Empower your business to reduce value chain emissions

Normative guides you along the full process of reducing value chain emissions, from initial measurement to supplier engagement.
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