Being “climate-responsible” is becoming a part of the corporate lexicon with firms measuring, reporting, and reducing their carbon emissions – and being recognized for their carbon management efforts. Recently there has been growing pressure to look beyond the company’s immediate walls and measure scope 3 emissions – indirect emissions that result from the company’s operations but occur at sources owned or controlled by others.  To do so, the business identifies sources upstream and downstream from its operations in an attempt to calculate emissions throughout the entire value chain.

To aid in this complex effort, the GHG Protocol recently released a set of standards on quantifying scope 3 and product-level emissions. Although the standards were just published a few months ago, there are a number of companies – Kraft Foods, Baxter, UPS, and Google – that are already using the guidelines to track and set carbon reduction goals.  Companies that take a lead by becoming involved in screening assessments, case studies, or pilot programs will move ahead of their competition by understanding the numbers that generate their impact. 

Companies that are resistant to measuring their impact may be left behind. As reported in a recent blog post by Hugh Jones, the Carbon Trust Advisory found that “50% of multinationals expect to select their suppliers based upon carbon performance in the future and 29% of suppliers could lose their places on ‘green supply chain’ if they do not have adequate performance records on carbon”.

Organizations that take a comprehensive view of their products and their value chain will understand the sources of their emissions and where corporate risks and opportunities lie related to carbon management. Through corrective actions the company can reduce inefficiencies while saving on costs and resources and through transparent disclosure the company can educate and engage a conscious consumer base.

A case study published on the Ecova website features a recently completed carbon footprint assessment of Burgerville restaurant’s beef product. The analysis looked at over 80 processes from ranch to processing center to final disposal of the burger wrapper revealing operational strengths as well as opportunities for improvement within the beef value chain.  While Burgerville has a remarkably transparent supply chain and well-established stakeholder relationships, the retailer recognizes opportunities for reduced resource consumption and improved data management strategies.

Much like the many companies getting a head start on understanding the impact of their value chain, this analysis lead to a deeper understanding of the organization’s impact and set out a path for moving forward. When as much as 50% of the average organization’s emissions are scope 3, doesn’t it make sense to extend your metrics to your supply chain as well?