Creating a sustainable supply chain is becoming increasingly important as regulatory, consumer, and investor pressures combine to demand more from global supply chain providers. And with supply chains accounting for 11.4 times as many emissions as a company’s own operations, according to the Carbon Disclosure Project (CDP), the pressure is amplified.
But the challenge is great. Companies can’t manage what they can’t measure, and Scope 3 emission data — which companies have the least control over — is notoriously difficult to obtain. When it can be obtained, it’s often inconsistent between suppliers.
That’s where big data and data analytics come in, not only in gathering the right data, but also in making sense of it to inform the right decisions on the path to greater supply chain sustainability.
Understanding Scope 3 Emissions
First, we need to understand exactly what Scope 3 emissions are. The Greenhouse Gas (GHG) Protocol defines three scopes:
- Scope 1: Direct GHG emissions controlled by a company
- Scope 2: Indirect GHG emissions from a company’s use of energy, like steam, heat, and cooling
- Scope 3: Indirect GHG emissions associated with a company’s entire value chain, including suppliers, customers, and product lifecycle.
Scope 3 emissions are by definition the farthest outside of a company’s direct control, but since they account for up to 75% of a company’s emissions, according to the World Resources Institute (WRI), they present the greatest opportunity for impact in sustainable supply chain management.
Because getting a handle on Scope 3 emissions involves collaboration with stakeholders throughout the value chain, comprehensive measurement and mitigation strategies are needed. Thankfully, the WRI demonstrated that companies are trending in the right direction on Scope 3 reporting, thanks in part to the United States Securities and Exchange Commission (SEC) climate disclosure rule and similar standards in the European Union and globally.
With more data being reported than ever, data analytics are critical to getting the most out of the data generated throughout the supply chain.
Importance of Data Analytics for Scope 3 Mitigation
To achieve net zero by 2050, as outlined in the United Nations Net Zero Coalition and the Paris Agreement, companies need to start taking action today. Data analytics are the key to identifying, measuring, and managing Scope 3 emissions to achieve any quantifiable emission reductions on the path to net zero.
Advanced analytics allow companies to track emissions sources, assess their impact, and develop targeted mitigation strategies to reduce carbon footprints and enhance sustainability across the supply chain.
According to the “Big Data and Environmental Performance” study being published in the Finance Research Letters June 2024 volume, Big Data Analytics (BDA) utilization has a favorable influence on environmental performance. In other words, knowledge is power, and the more companies can channel the power of big data tools like artificial intelligence (AI) and machine learning (ML) toward disparate data sets, the better they interpret insights at scale.
All that said, there’s a big difference between citing the right big data buzzwords and actually uncovering actionable insights. A recent report in Nature Partner Journals on “Supply Chain Data Sharing for Scope 3 Emissions” outlined three primary obstacles to Scope 3 emissions data sharing:
- Legal and regulatory challenges – these include questions about data ownership, data access, and re-use of data, factoring in complexities like anti-competition laws and data localization measures to limit data flows across international borders.
- Interoperability – this is defined in the journal article as “a measure of the degree to which diverse systems, organizations, and/or individuals are able to work together to achieve a common goal,” which includes both harmonized GHG standards and a common IT infrastructure.
- Data privacy – firms that view their production-level emission data as a competitive advantage are rightly hesitant to divulge their practices on the open market, even through standardized disclosure protocols and mandatory reporting practices.
In the face of these challenges, solutions like influencing policy to remove regulatory barriers, creating a common IT infrastructure, and establishing neutral data trusts are being introduced to incentivize progress. However, while many companies want to overcome these challenges to identify cost-effective carbon footprint reduction strategies, many don’t know where to start, which is where industry partnerships can play a major role.
Greenabl: Actionable Reporting for Scope 3 Mitigation
Organizations like the Greenabl Shippers Association provide cooperative frameworks to achieve global supply chain sustainability and decarbonization. Greenabl is a comprehensive sustainability platform empowering businesses to track, mitigate, and report emissions across their supply chains. Through data-driven solutions and collaborative partnerships, Greenabl facilitates environmental compliance, operational efficiency, and positive impact, enabling organizations to achieve their supply chain sustainability goals in a dynamic regulatory environment.
Given the importance of data analytics discussed previously and the challenges that many importers, exporters, carriers, and other supply chain players face, Greenabl offers a tangible solution to help make sense of the ever-growing volume of supply chain data available. That’s accomplished through three primary means.
Comprehensive Data Collection
Greenabl provides tools and technologies for comprehensive data collection across the supply chain, enabling shippers to gather accurate and granular data on Scope 3 emissions sources. The 360-degree platform becomes a single point of truth to measure, mitigate, and offset CO2 emissions from all modes of transportation.
Whether you’re just looking for how to start reporting Scope 3 emissions or you have processes in place and are looking for actionable steps to reduce them, Greenabl’s reliable measurement and mitigation mechanisms can help.
Greenabl leverages the best-in-class GLEC (Global Logistics Emissions Council) Framework, the only recognized methodology for the harmonized calculation and reporting of GHG footprints across all carriers and modes. GLEC also uses a consistent activity-based methodology that generates data from the actual activities of each supplier, not just spend-based methods that estimate carbon footprints based on the economic value of goods they produce.
If data integration is an issue, Greenabl can help there too via our various industry partnerships. Splice, for example, can integrate and automate logistics data flows, making data integration easier.
Advanced Analytics
Leveraging advanced analytics capabilities like AI and ML, Greenabl analyzes collected Scope 3 emissions data to identify emission hotspots, assess trends, and recommend targeted mitigation strategies tailored to each shipper’s specific needs.
Integrations can play a role here as well, since Greenabl has the capability to integrate to a client’s TMS system via direct API. So instead of your team needing to access yet another system, carbon reduction insights can become part of regular workflows and decision-making processes.
Actionable Insights
Greenabl translates complex data from a wide variety of reliable data sources for suppliers throughout the supply chain into actionable insights, empowering shippers to make informed decisions and prioritize mitigation efforts to effectively reduce Scope 3 emissions throughout their entire supply chain.
For example, Greenabl recommendations can help importers and exporters identify underperforming suppliers, optimize routes and modes, and pinpoint carbon offset targets to meet carbon mitigation and reduction approaches on the path to net zero.
Greenabl carbon credits are vetted and procured using accredited registries like Gold Standard and VERRA ratings, so companies that aren’t able to immediately reduce Scope 3 emissions can choose carbon projects to offset their emissions output.
Supply Chain Sustainability Demands Getting Scope 3 Emissions Under Control
While many companies have made great progress in reducing their Scope 1 and 2 emissions, progress has been elusive on Scope 3 since it involves so many different stakeholders throughout the value chain. But tightening regulations are forcing exporters and importers to grapple with ways they can make actionable progress.
As more and more suppliers disclose data, it’s more possible to make data-informed decisions, but the volume of data is now becoming prohibitive for many companies. Is the data clean? How can the data best be used? Many companies, once overwhelmed by the prospect of getting data, are now getting it but are overwhelmed by what to do with it.
That’s where partnering with industry providers like Greenabl can make a world of difference, combining comprehensive data collection, advanced analytics, and actionable insights into one platform and process.
Ready to leverage big data to make your supply chain more sustainable? Connect with Greenabl and the best-in-class digital platform for shippers, ocean carriers, dray/trucking providers, ports, and intermediaries, to get your Scope 3 emissions under control.
