Why Supplier Engagement is Crucial for ESG Success

Mitigating scope 3 emissions presents unique challenges for businesses; however, if successfully managed, they also offer significant opportunities. But how do you manage the challenges associated with scope 3 emissions data to turn them into opportunities for your business?

In this blog, we will explore why supplier engagement is crucial for managing scope 3 emissions and benefiting from the opportunities they present.

Understanding Scope 3 Emissions

Scope 3 emissions encompass indirect greenhouse gas emissions that occur throughout a company's value chain, including both upstream and downstream. This includes activities such as purchasing goods and services, transportation and distribution, and waste disposal. These emissions often account for a large portion of a business’s total carbon footprint and can be the most challenging to measure and control.

What are the challenges?

Data Collection and Accuracy:

• Businesses often face difficulty in collecting accurate data due to the complexity of their supply chains. Variations in data quality and standardised reporting methods among suppliers further complicate collection of Scope 3 emissions, making it difficult to compare emissions data across the supply chain.

Supplier Awareness and Capability:

• Many of your suppliers, especially smaller ones, may lack awareness of ESG principles and the importance of reporting Scope 3 emissions. This, coupled with resource constraints often limit their ability to measure and report emissions accurately.

Engagement and Communication:

• Aligning your suppliers' goals with your business’s ESG objectives can be challenging, especially in regions with varying regulatory environments, we see this now especially with vary new regulations coming out with different timelines. Additionally, if your suppliers have no incentive to invest in emissions reductions this can pose a significant barrier.

Turning Challenges into Opportunities with Effective Supplier Engagement

Being aware of the challenges is important but how do you address them and what steps do you take to turn them into opportunities?

Collaborating closely your suppliers to help them understand why you need emissions data will help build trust and ensure the data provided is accurate and timely. Providing them with educational resources on the reasons for reporting on emissions data such as e-books can help them understand the importance and why they are required to do it.

We have a bank of free e-books you can read and share with your suppliers here

You could also consider sharing best practice guides and case studies of other companies who have successfully implemented scope 3 emissions reporting.

Read our case study on Camden Group who implemented SustainIQ to help them report on their scope 3 emissions here.

While education is important, you also must make it easy for your suppliers to report and share data with you is also important. This is where technology is crucial. Implementing a digital platform can make scope 3 emissions reporting easier through real time data sharing and transparency.

Implementing Software Solutions for Enhanced Scope 3 Emissions Management

Integrating dedicated software solutions such as SustainIQ into your business’s tech stack can significantly ease the management of Scope 3 emissions:

• Data Collection Tools: SustainIQ simplifies the process of collecting emissions data from suppliers and subcontractors through dedicated forms. These forms are sent directly to suppliers and subcontractors, ensuring they can easily provide the relevant data needed for accurate Scope 3 emissions reporting.
• On-site Data Entry using QR codes: SustainIQ enhances on-site data collection by providing QR codes that suppliers can scan upon arrival. This quick access to forms allows them to promptly fill in the necessary data, streamlining the reporting process and improving data accuracy.
• Advanced Integration and Analytics: With API integrations, SustainIQ can seamlessly pull relevant data from other software systems. The reporting dashboard in SustainIQ allows you to track and benchmark Scope 3 emissions, identify high-emission suppliers, and make data-driven decisions to manage and reduce your overall carbon footprint.

By leveraging effective supplier engagement practices and integrating robust software solutions such as SustainIQ, you can not only navigate the challenges of managing Scope 3 emissions but also opportunities to enhance operational efficiency, mitigate risks, and strengthen your position in the market as a sustainable leader in the market.

Investing in a proven software and methodology, such as the one we provide at SustainIQ, can help companies start off on the right foot. Grab a chat with us to see how it could work for!

If you are still feeling overwhelmed, this document provides a good overview of the typical questions around scope 3 emissions.