INVERTO: Scope 3 Emissions Surge Amongst FTSE 100

FTSE 100 companies saw their supply chain emissions climb by 62 million tonnes of CO2 last year, reaching a total of 3.3 billion tonnes.

This represents a 3% rise compared to the previous year, according to a report from INVERTO, a supply chain consultancy that is part of Boston Consulting Group (BCG).

The research highlights a troubling trend: while businesses are pledging to cut emissions progress is uneven and slow. Scope 3 emissions are particularly significant because they encompass all carbon outputs from raw materials, purchased goods and services and the use of end products by customers.

Among FTSE 100 firms, 86 disclosed Scope 3 emissions in their sustainability or annual reports. However, not all companies include Scope 3 data in their reporting, suggesting that the true emissions figure could be even higher.

The challenge of decarbonising supply chains

The increase in emissions among FTSE 100 companies mirrors a global struggle to decarbonise.

According to BCG’s study, 'Boosting Your Bottom Line Through Decarbonisation,' Scope 3 emissions are still on the rise worldwide. Even major US tech firms with ambitious long-term carbon reduction targets are grappling with increasing emissions.

In Europe, just 10% of businesses are cutting emissions at a pace that aligns with their stated goals.

“There is not going to be an easy glidepath to net zero. It will need a thorough strategic review of supply chains, careful planning and hard work,” comments Kiren Pandya, Principal at INVERTO. 

Among the FTSE 100 companies, 37 reported increased supply chain emissions last year, while 32 achieved reductions. The rest either showed no change, did not provide detailed Scope 3 data or were new additions to the index.

This mixed performance has raised questions about whether the UK’s biggest firms can meet their net zero targets.

Kiren adds: “These figures clearly demonstrate that despite the commitments made by businesses, there is still a long way to go to achieve net zero for the UK’s largest companies.”

Positive momentum amidst challenges

Despite the overall rise in emissions, there are encouraging signs of progress.

More FTSE 100 companies are taking steps to address their environmental impact. The number of firms reporting on net zero initiatives rose from 53 to 68 in the past year. Similarly, companies with formal emissions reduction strategies increased from 50 to 78.

“This sharp year-on-year rise shows that a growing proportion of the UK’s biggest companies are becoming more transparent about their carbon emissions—and what they’re intending to do about them in the future,” says Kiren.

The report also highlights that companies with climate transition plans are more than three times as likely to reduce their emissions.

High-emission sectors, including oil, gas, mining and engineering, account for 92% of total Scope 3 emissions among FTSE 100 firms—highlighting the importance of targeted action in these industries.

“What’s really positive is that more and more companies are actively tracking their Scope 3 emissions and now have detailed plans in place to reduce them,” Kiren notes.

Practical steps towards emissions reductions

To tackle rising emissions, INVERTO recommends focusing on straightforward, achievable measures.

Addressing supply chain inefficiencies, sourcing materials locally and decarbonising transport and logistics can significantly cut emissions in the medium term.

“The bulk of supply chain emissions reductions are relatively easy to realise in the medium term. Businesses should be focusing on the ‘low-hanging fruit’ in their Scope 3 emissions,” says Kiren.

Advanced technologies also offer solutions. BCG’s research shows that companies using AI to optimise emissions reduction are 4.5 times more likely to achieve meaningful decarbonisation results. AI can assist with identifying inefficiencies, streamlining processes and forecasting more sustainable strategies.

Achieving net zero is no small task. It requires careful planning, innovation and a sustained commitment to change.

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