Anthesis: How to Prioritise Scope 3 in Supplier Engagement

Companies today are increasingly focused on reducing emissions in their value chains, or Scope 3 emissions, as a vital step towards meeting climate targets.

While companies have often found it challenging to quantify and address these indirect emissions, in 2024 many have renewed efforts to improve sustainable supply chain practices through stronger supplier engagement.

This year has seen a notable rise in regulations and market expectations that push companies to accelerate these efforts.

Anthesis explored how organisations are managing Scope 3 emissions and setting the stage for more resilient supply chains in its latest report. 

The impact of supply chain emissions

According to Anthesis, for most companies, the emissions generated through their supply chains are significantly larger than their direct operational emissions - roughly 11.4 times greater.

As the majority of a company’s carbon footprint falls under Scope 3, many are setting ambitious goals to engage suppliers more actively to gather accurate emissions data and drive reductions.

However, without proper data collection systems and supplier collaboration, many companies have found it difficult to move beyond setting targets and drive effective action.

Increasingly, regulatory changes are adding momentum to Scope 3 efforts. Legislation such as California’s Climate Corporate Data Accountability Act, the EU’s Corporate Sustainability Reporting Directive (CSRD) and the UK’s Public Procurement Note 06/21 now require companies to disclose or reduce value chain emissions.

These measures signal a growing emphasis on corporate responsibility to measure, manage and mitigate Scope 3 emissions in line with evolving climate goals.

Key strategies & technology-driven solutions

The trend toward enhanced Scope 3 supplier engagement involves using new technologies and better practices to improve data collection and foster transparent relationships with suppliers.

The scope of this change includes transitioning from generalised emissions estimates to direct data from suppliers - no easy task but crucial for reliable reporting.

Companies are increasingly prioritising supplier collaboration and transparency, as building trust is essential to encourage suppliers to report accurate data and reduce emissions.

A notable shift from traditional environmentally extended input-output (EEIO) models to direct supplier reporting is underway. This shift requires new tools to collect, manage and track supplier data, which many companies are implementing through targeted software solutions. Such technology helps companies monitor supplier reduction plans, track progress and ultimately create a clearer picture of their impact.

Suppliers who adopt these practices also gain from market appeal and can even provide added value to business customers seeking sustainable solutions.

Building trusted relationships with suppliers 

To effectively drive Scope 3 reductions, companies must build transparent, trusted partnerships across their supply chains.

Successful Scope 3 supplier engagement strategies typically emphasise clear communication, support for suppliers on climate initiatives and integrating sustainability criteria into supplier contracts.

Companies like Veritas are making headway by setting science-based targets, aiming for 50% of their suppliers to establish their own targets by 2025.

To achieve this, Veritas has integrated sustainability into supplier contracts and regular business reviews, established a supplier code of conduct and even developed a Supplier Sustainability Guide to help suppliers meet emissions reporting standards.

Engaging suppliers to adopt emissions targets can create a ripple effect that extends sustainable practices across industries.

As companies work more closely with suppliers on these goals, they contribute to systemic change throughout the supply chain, building resilience and positively impacting the environment.

Many companies are learning from their 2024 experiences to refine supplier engagement programmes further. Lessons learned this year are anticipated to shape 2025 strategies, with an emphasis on creating more collaborative, transparent and technology-driven approaches to Scope 3 emissions management.

In the coming years, Scope 3 supplier engagement will be essential for companies that want to align with ambitious climate targets, meet regulatory demands and contribute to a broader climate transition.

By addressing the most significant sources of emissions in their value chains and supporting suppliers on the journey to net zero, companies can play an instrumental role in tackling global emissions challenges.

As more companies adopt these practices, we are likely to see greater collaboration and innovation across industries, paving the way for a sustainable future.

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