Building a business case for supply chain emissions software

As the world moves toward a decarbonized future, businesses are increasingly aware of the importance of having supply chain emissions software to help them reduce…

As the world moves toward a decarbonized future, businesses are increasingly aware of the importance of having supply chain emissions software to help them reduce their carbon footprint. Companies that thrive in the decarbonized future are placing an emphasis on reducing supply chain emissions today because, on average, over 90% of a company’s emissions come from its supply chain.

Unfortunately, it is much more difficult to collect, analyze, and act on data that comes from outside of your organization. Implementing supply chain emissions software can be a critical step in making your Scope 3 emissions and reduction plan clearer. 

If you’re reading this blog, you’ve probably already made that realization. The hard part now is getting the buy-in you need to make the investment in supply chain emissions software. 

In this blog post, we’ll walk you through the main steps in building a persuasive business case so you can get your leaders on board for a supply chain emissions platform. 

Step 1: The business case for focusing on Scope 3 emissions

Before convincing stakeholders to align on a specific solution, you need to be on the same page about the problems you’re looking to solve. Begin by clearly defining how reducing supply chain emissions will have a positive impact on the organization’s bottom line.

Here are some common motivations our clients have shared for focusing on Scope 3:

  • Remaining compliant with existing and upcoming regulations: Governments and regulatory bodies are taking significant steps to address climate change. Regulations like the EU’s Corporate Sustainability Reporting Directive (CSRD) and CSDDD, and the SEC climate disclosure rules will require corporations to disclose material Scope 3 emissions alongside their financial reporting – and those numbers will need to be accurate and auditable. Helping your finance, compliance, and legal counterparts understand the requirements and the risks of non-compliance can bolster your support in your organization.
  • Meeting customer and employee expectations: Customers and employees expect businesses to be transparent about their sustainability efforts and demonstrate a commitment to reducing their carbon footprint. Companies that transparently share their sustainability plans and progress will in turn improve their brand perception, increase customer loyalty, and be able to attract and retain top talent–all things that your stakeholders (especially those in HR, marketing, comms, and at the executive level) will care about. 
  • Improving supply chain decision-making and relationships: Deepening your engagement with suppliers on matters such as sustainability and emissions can also help deepen your relationships and future-proof your supply chain strategy. It can also lead to improved efficiency,  reduced costs, and innovation along your supply chain – all important factors that your operations and procurement colleagues will be considering.
  • Future-proofing your business for a low-carbon future: Setting and achieving emissions reduction goals helps ensure your company can thrive in the low-carbon future. Scope 3 emissions open up big questions for how your company will continue to thrive, with implications across your business’s partnerships strategy, sourcing model, and product offering. Software can help you set and achieve your targets while enabling you and your executive team to answer these existential questions.

Step 2: Define the problems with your existing approach

You have a clear idea of the pain points you face when it comes to achieving your emissions reduction goals. Now, you need to clearly define those challenges so your stakeholders understand why carbon accounting software will be an important resource in reaping all of the benefits listed above. 

Here are some common problems you might want to highlight:

  1. Lack of data and/or unreliable data
  2. Communication gaps in your  supply chain
  3. Inability to strategically prioritize decarbonization efforts along your supply chain
  4. Scalability issues with your current tool – especially as your supply chain continues to grow in size and complexity

Step 3: Outline potential solutions and explain why supply chain emissions software is the best option for you

Next, you’ll want to make sure your stakeholders know the other options you have considered in addressing your pain points – and why you believe a dedicated software solution should be the path forward.

Many sustainability leaders are still using manual tools like Excel or general Business Intelligence software to manage supply chain emissions. If you’re in that boat, you may relate to the following limitations:

  • Dealing with a time-consuming and manual process of getting your data entered and analyzed
  • Performing self-driven calculations that can lead to human errors
  • An inability to dig deep and understand micro-trends or identify emissions hot spots in your supply chain
  • Trying to make a generic tool fit the needs of your highly specific use case

A dedicated supply chain emissions software, on the other hand, is the best solution if your organization wants to reap these benefits:

  • Data visualization: Carbon management software offers built-in and specialized data visualization capabilities, enabling stakeholders to understand and analyze emissions data more effectively.
  • Easier reporting: With streamlined reporting functionalities, software can simplify the process of generating accurate and comprehensive emissions reports. Most software providers have specific download options, depending on which regulatory body you are reporting to. 
  • More streamlined and optimized operations: Software takes a significant workload off of your plate, enabling you to spend time where it matters–moving the needle on emissions reductions. 
  • Cost savings: By investing in a software solution, you can reduce reliance on consultants, leading to long-term cost savings.

Start building your business case today

To survive in the decarbonized future, organizations must act now to understand and reduce their emissions, especially along their supply chain. The most effective way for organizations with large, complex supply chains to manage and act on their emissions data is to use a dedicated supply chain emissions platform. 

If you would like assistance putting together a business case to present to your stakeholders, Optera’s team of experts can help — get in touch today

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