What's Happening?
RESET Carbon, a Hong Kong-based emissions reduction consultancy, has released analysis and modeling indicating that engaging key suppliers in the retail and food manufacturing sectors can significantly
reduce Scope 3 emissions. These emissions, which are indirect and occur across supply chains, typically account for over 80% of a company's total carbon footprint. The consultancy suggests that initial reductions of 15-30% can be achieved quickly through collaboration on existing technologies, with larger cuts of 40-60% possible in the longer term through energy or fuel switching. The report comes as the United Nations Climate Change Conference (COP30) begins, highlighting the urgent need for strategies to meet global temperature targets set in the Paris Agreement.
Why It's Important?
The findings from RESET Carbon underscore the critical role of supply chain management in achieving carbon reduction goals. As businesses face increasing exposure to carbon pricing through mechanisms like the EU Carbon Border Adjustment, proactive engagement with suppliers can mitigate long-term carbon cost risks. This approach not only aligns with global climate targets but also offers economic benefits through efficiency and renewable energy investments. Companies in high-emission sectors such as energy, apparel, consumer goods, technology, and food and beverages are already implementing programs to reduce emissions, demonstrating the potential for industry-wide impact.
What's Next?
Businesses are encouraged to integrate emissions targets into sourcing decisions, ensuring carbon performance becomes part of standard commercial strategy. RESET Carbon recommends starting with carbon hotspot mapping at the supplier facility level to prioritize investments where emissions are most concentrated. This strategic engagement can lead to the creation of facility-level emissions reduction roadmaps, supporting supplier engagement and commercial alignment. As suppliers serve multiple brands, coordinated approaches can reduce duplication and create stronger incentives for investment in low carbon solutions.
Beyond the Headlines
The consultancy highlights the importance of cross-industry collaboration as a powerful enabler of supply chain decarbonization. Coordinating carbon reporting requirements and sharing supplier performance benchmarks can reduce cost and complexity, accelerating net zero delivery across sectors. Standardized data frameworks and benchmarking tools can ease the burden on suppliers and support more informed procurement decisions, aligning with a company's climate ambition.
