The UK chemical sector is urged to ‘get its act together’ when reporting on actions to reduce its supply chain emissions.
A new Carbon Action Report claims that only 6% of UK businesses have set a Scope 3 target and are on track or ahead of schedule to achieve it. The report concludes that low levels of action pose significant financial risks and a threat to national and global climate goals.
It also comes as the British government is considering moving towards international sustainability standards and making disclosure of supply chain emissions mandatory –not currently the case in the UK.
Pierre-François Thaler, co-founder and co-CEO of report co-author EcoVadis, said: “Chemical supply chains are complex and multi-tiered, with a high reliance on many suppliers, often across different territories in the world. This makes data collection difficult and emission reduction efforts tough.
“The biggest challenge lies in the massive scale of indirect emissions from these suppliers and the need for significant collaboration between different supply chain parties to enable accurate reporting to be carried out.
“However, with the British government in the process of making disclosure of supply chain emissions mandatory in line with international sustainability standards, the automotive industry needs to be active in this area.
“Our report clearly shows that businesses need to up the ante especially when reporting on their status against science-based climate targets for Scope 3 emissions.
“We are at a pivotal point in business-led carbon action globally and the UK is no exception. Tackling supply chain emissions, whilst undoubtedly complex and challenging due to their global nature, arguably holds the key to securing the biggest environmental prize of them all.
“Our report revealed that for the average company globally, Scope 3 emissions are 21 times larger than Scopes 1 and 2 combined, but across the world only 24% report on them, and just 8% set reduction targets.
“The financial risks of climate inaction are clear, but so are the opportunities. By addressing Scope 3 emissions, chemical companies can protect profitability while building a more resilient supply chain. The time to act is now, and the most effective place to start is with suppliers, where most emissions lie.”
The report identified the five most impactful actions that chemical companies should take to move from awareness to action and accelerate supply chain decarbonisation:
- Supplier engagement: engage suppliers on ambition and need for climate action, and partner to launch joint emissions reduction activities.
- Emissions measurement: set up a greenhouse gas (GHG) inventory, with monitoring across operations (including product-level data as a late-stage action)
- Climate-aligned management team: establish a dedicated management team that sets and owns the net-zero agenda
- Climate transition plan: define a company-wide low CO2 climate transition plan aligned with the net-zero future
- Emissions reduction budget: allocate a dedicated budget to fund the net-zero transformation
