Reducing emissions from across your company’s operations is hard. However, for many large companies, the real challenge lies upstream. Supply chain emissions often account for the majority of an organization’s footprint, yet they’re often the most difficult to measure, influence, and reduce.
In a recent webinar on how sustainability and procurement teams can collaborate on supply chain sustainability, one theme came through clearly: addressing supply chain emissions is difficult because it requires indirect influence, but also offers some of the greatest opportunities for business impact.
In this blog, we’ll explore why supply chain emissions matter more than ever, why they’re so difficult to address, and how they can become a powerful lever for decarbonization, cost savings, resilience, and brand reputation.
Why supply chain emissions matter more than ever
For companies in sectors like retail, manufacturing, and consumer goods, supply chain emissions typically make up the largest, or second largest, share of their overall footprint.
Beyond sheer scale, supply chain emissions are significant because they sit at the intersection of multiple business drivers. Investors are demanding more business and supply chain transparency and continuity. Consumers are rewarding brands that demonstrate sustainable sourcing. And regulations from the EU’s CSRD to California’s SB 253 are introducing mandatory disclosure rules that require better supplier data.
All of this adds pressure—and motivation—to prioritize supply chain decarbonization.
Ty Colman, Chief Revenue Officer and Co-Founder at Optera, explains that while Scope 3 emissions are complex, they also represent an unmatched opportunity to drive material business impact.
The challenges of addressing supply chain emissions
You have a direct ability to address your scope 1 and 2 emissions by pulling internal levers like upgrading equipment, improving operational efficiency, or sourcing renewable energy.
Supply chain emissions, on the other hand, cannot be directly controlled—their reduction depends on your ability to influence others.
Catherine Ceresa, Senior Manager of Supply Chain Sustainability at onsemi, emphasizes that although Scope 3 reductions rely on indirect influence rather than direct control, they often have a much larger climate impact than scope 1 and 2 reductions.
Reducing supply chain emissions starts with getting procurement on board. Because procurement manages supplier relationships, sustainability teams must gain buy-in from these counterparts, align on shared goals, and embed emissions criteria into existing tools like vendor scorecards and supplier evaluations. This requires ongoing collaboration and a clear case for why climate action matters alongside procurement’s core priorities like cost, resilience, and risk management.
Ceresa underscores the pivotal role of procurement in driving supplier action and notes that sustainability teams must equip their procurement peers with the knowledge necessary to drive that supplier action.
Then comes the second layer: the suppliers themselves. Many suppliers may not have the emissions data you need or the systems to report it accurately. You may need to educate them, guide them through data submission, and help them access tools or resources to decarbonize.
The opportunity behind the challenge
Although supply chain emissions can be difficult to address, when done successfully, the return is significant. Supply chain sustainability is a business strategy that delivers value across cost, risk, resilience, and brand.
Building a sustainable supply chain often results in:
• Greater supply chain resilience through stronger relationships, climate engagement, and proactive planning that improve agility and continuity in the face of disruption
• Cost savings and predictability by uncovering inefficiencies in freight, packaging, and supplier operations
• Improved risk management by reducing exposure to supplier-level climate vulnerabilities, regulatory non-compliance, and material or logistics disruptions
• Greater brand loyalty through transparent, values-driven supply chain practices that meet rising expectations from institutional buyers and consumers
• Investor confidence as sustainability performance becomes a growing factor in ESG assessments and capital access
Maayan Kaplan, Senior Director of Customer Success at SPS Commerce, highlights how working with suppliers on sustainability can lead to cost efficiencies and improved brand loyalty.
In short, reducing supply chain emissions is no longer just the right thing to do, it’s a high-return business strategy that strengthens resilience, reduces risk, lowers costs, and builds long-term brand and investor value.
The cost of delaying supply chain sustainability
Supply chain decarbonization is a long-term strategy, and that’s exactly why it’s important to start now. Building a supplier engagement program takes time. Many suppliers may need months or even years to collect data, set goals, or begin emissions reduction efforts. The earlier you begin that process, the better positioned you will be to meet future disclosure requirements and manage long-term business risk.
Ceresa warns that the longer companies wait to engage suppliers on Scope 3 emissions, the more costly the consequences, and the more they’ll have to rely on quick fixes like offsets.
That does not mean you need to launch with a fully scaled program on day one. Starting small and evolving your program over time is often the most realistic and effective approach. Colman reminds us that great supply chain sustainability programs take time to build and that long-term vision and incremental steps can ultimately deliver transformative benefits.
Delaying engagement means missing the chance to shape supplier relationships early and build a competitive advantage. Companies that act now are co-investing in decarbonization, securing lower-carbon materials, and strengthening supplier collaboration. Getting started today will put you in a stronger position tomorrow.
Want to go deeper?
Acting on supply chain sustainability is one of the most powerful ways sustainability teams can contribute to long-term business value. Early engagement sets the foundation for lower costs, stronger supplier relationships, reduced risk, and increased market competitiveness.
This was just one topic covered in the webinar. To hear the full conversation on how ESG and procurement leaders are working together to advance supply chain sustainability and deliver meaningful business outcomes, listen to the full panel discussion.
