For most companies, scope 3 emissions from suppliers represent their biggest environmental impact—on average 11.4 times larger than operational emissions. As pressure grows to reduce scope 3 emissions, spend-based emissions estimates aren’t cutting it. Rather than lean on those estimates, leading organizations are revolutionizing their supplier engagement programs to collect supplier-specific data. That transition is better equipping them to achieve real scope 3 decarbonization.
For many companies, supplier engagement and the transition to supplier-specific data are major challenges—but not insurmountable. Read on for a breakdown of our recent research, along with a framework and action items on how to tackle these initiatives at your own company.
Looking for in-depth guidance to setting up a supplier engagement strategy? Download our Complete Guide to Supplier Engagement.
Overcoming the scope 3 emissions data challenge
Scope 3 emissions often come from complex, global supply chains involving hundreds or thousands of suppliers. Traditional approaches to measuring scope 3 emissions—using industry averages or spend-based calculations—fall short in providing the granular insights that true decarbonization requires.
Our research found that 40% of respondents cite scope 3 emissions data gathering as their biggest challenge, with this number rising to 55% for companies with revenue above $10B. The larger and more complex the supply chain, the more challenging it becomes to source accurate, specific data.
Responses to our 2024 survey cite the following as key challenges in scope 3 emissions data collection:
- Inconsistent data quality across supplier responses
- Manual data collection processes
- Complex supplier organizational structures
- Limited visibility into supplier operations
Despite these challenges, the shift toward deeper supplier engagement is accelerating. Nearly 70% of large companies are actively engaging suppliers in decarbonization efforts. And 46% have committed to a science-based target for scope 3 emissions reduction, meaning that they are actively working to overcome challenges in their scope 3 data management to achieve real decarbonization progress.
How are they doing it? Keep reading for our supplier engagement framework, and click below for an on-demand workshop where you’ll be guided through the process of making the switch to supplier-specific emissions data.
Learn more about calculating scope 3 emissions with supplier-specific data in our on-demand workshop, PGS Playbook: Calculating scope 3, category 1 emissions with supplier-specific data.
Evolving beyond basic scope 3 emissions data requires strategic supplier engagement
The journey from spend-based calculations to supplier-specific scope 3 emissions data represents a crucial evolution in emissions management. While spend-based methods provide a quick and accessible starting point for many companies, accurate primary data is required to achieve actual supply chain decarbonization. And getting your hands on that accurate primary data requires hands-on supplier engagement.
Leading companies are now prioritizing supplier engagement to collect primary scope 3 emissions data. Active supplier engagement is deeply beneficial to your organization’s emissions management strategy. It provides:
- More accurate emissions calculations
- Better identification of reduction opportunities
- Ability to track supplier progress
- Enhanced credibility of reporting
However, shifting toward supplier-specific data is not without its challenges. Through our work with clients over many years, Optera has developed a framework for engaging with suppliers to generate more accurate emissions data.
How to build an effective supplier engagement program
Successfully reducing scope 3 emissions requires a comprehensive supplier engagement strategy that starts with clear goals, builds through systematic data collection, and continuously improves over time.
Here’s how leading companies are structuring their supplier engagement efforts:
Goal-setting
- Beginners, focus on fundamentals like mapping your supply chain, basic data collection, or identifying high-impact suppliers
- More advanced programs can set a supplier-focused science-based target (SBT), set an absolute emissions reduction goal, or set an emissions intensity reduction goal
Strategic supplier prioritization
- Focus on suppliers representing 80% of spend or expected emissions
- Leverage industry databases like CDP for initial emissions estimates
- Create a landscape assessment of supplier readiness and capability
- Identify high-impact suppliers for direct engagement
Internal alignment
- Build cross-functional partnerships with procurement, supply chain, and finance teams
- Establish clear roles and responsibilities for supplier data collection
- Secure executive sponsorship for program success
- Align supplier engagement goals with broader business objectives
Setting up data collection and management
- Work with industry organizations like CDP to source data
- Choose a dedicated carbon management platform to collect and manage data
- Or DIY a survey and data management solution
Educating, incentivizing, and support suppliers
- Provide training workshops on scope 1, 2, and 3 emissions
- Host Q&A sessions for suppliers at different maturity levels
- Offer technical support for emissions calculation
- Create resources to help suppliers identify reduction opportunities
- Develop supplier scorecards to track performance
- Integrate emissions data into procurement decisions
- Recognize and reward high-performing suppliers
- Create competitive advantages for suppliers who actively participate
Managing supplier data
- Consider data privacy and confidentiality for the data you’ve collected
- Set up progress tracking, benchmarking, and trend analysis
- Consider whether you’ll share data and feedback with the suppliers themselves
Tracking supplier performance and overall progress
- Set up supplier dashboards or check in manually with suppliers to share feedback on their progress
- Develop supplier benchmarking or a scorecard
- Report progress if required by your SBT
Continuous improvement
- Collect supplier data annually
- Track progress against established benchmarks
- Expand program coverage year over year
- Refine engagement strategies based on supplier feedback and results
Get in-depth guidance on each of these steps in our Complete Guide to Supplier Engagement.
The future: product-level scope 3 emissions data
Speaking of continuous improvement, our research reveals growing sophistication in supplier engagement and scope 3 emissions management. For leading companies, sustainability teams are already thinking about what comes after supplier-specific data: 70% of them plan to use product-specific emissions data to inform their decision-making about suppliers, and that rises to 80% among companies with over $10B in revenue.
This granular approach will enable:
- More informed supplier selection
- Better product development strategies
- Enhanced consumer communications
- Improved regulatory compliance readiness
For now, widespread product emissions data is still on the vision board rather than a current reality. In the meantime, the most accurate scope 3 emissions data requires supplier-level specificity. Success requires a systematic approach to supplier collaboration, robust data management practices, and the right tools to support these efforts.
The companies that master supplier engagement will be better positioned to improve their scope 3 emissions data quality, meet science-based targets, comply with emerging regulations, and ultimately drive meaningful emissions reductions.
