Connect with your suppliers and measure your footprint, together.​

75% of your emissions come from your supply chain (Scope 3)​. How can you start to fix it? Learn more in our interactive mini-guide and turn your scope 3 emissions into a circular opportunity.

Supply Chain Hotspot

Do you have control over your value chain?

For many years, the primary focus of initiatives that aimed to reduce the environmental impact were targeted at the “owned” production processes – scope 1 and 2 emissions.

More recently, organizations have started taking responsibility and accountability for the impact of their entire value chain. Although they are not directly caused by a company, they can absolutely be influences by business decisions related to e.g. material and design choices.

Scope 1 emissions are direct emissions that you own and control.

Scope 2 emissions are indirect emissions from purchased energy.

Scope 3 emissions are emissions that occur along your value chain, both upstream and downstream.

On average, Scope 3 emissions account for more than 3/4 of the total emissions of a company. That means that the biggest potential to reduce the overall impact lies there.

To achieve a fully circular economy, companies need to be accountable for their entire value chain.

Greenhouse gas emissions, or other environmental impacts are categorized into three groups or “scopes” by the most widely-used international accounting tool, the Greenhouse Gas (GHG) Protocol.
Scope 1 covers direct emissions from owned or controlled sources. Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company. Scope 3 includes all other indirect emissions that occur in a company’s value chain. www.wbcsd.com

Want to get hands-on? Get our in-depth supply chain whitepaper.

How do you implement circularity throughout your value chain? In this whitepaper, we provide you with the in-depth knowledge you need to implement circularity today.

Supply Chain Whitepaper

What are the risks of neglecting my scope 3 emissions?

Managing environmental impact from corporate activities is increasingly becoming a mainstream management issue.

Potential liabilities from GHG exposure (and other environmental impacts) arise from

  • unstable resource and energy costs
  • future resource scarcity
  • environmental regulations
  • changing consumer preferences
  • scrutiny from investors and shareholders
  • reputational risk from other stakeholders.

Hence companies have become increasingly transparent about their value chain environmental impacts. This materialized in the disclosure of scope 3 GHG emissions as well as other disclosures such as the ‘EP&L’ (environmental profit & loss) account which was disclosed by more and more organizations. More recently companies have also started to set targets on their value chain environmental impacts. 

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Of emissions are scope 3 emissions
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Companies have joined the Science Based Targets Initiative (SBTI), committing to reduce their greenhouse gas emissions in line with climate science
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Of these already have approved scope 3 targets

Circular economy: Your biggest business chance

In recent years, much attention was devoted to the circular economy (CE) by McKinsey. The key question being how industries can increase their profitability while reducing their dependence on natural resources? The research has shown that the circular economy—using and reusing natural capital as efficiently as possible and finding value throughout the life cycles of finished products—is at least part of the answer: such an approach could boost Europe’s resource productivity by 3 percent by 2030, generating cost savings of €600 billion a year and €1.8 trillion more in other economic benefits.

However, this scenario requires transformation of many value chains. And to do so, societies need to adopt various ‘R’ scenarios (e.g. refuse, re-use, re-think, re-manufacture etc.) which go far beyond just recycling alone. The main challenge being that companies need to collaborate more closely with supplier as well as customers and other stakeholders.

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Potential cost savings through CE per year
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Economic benefits for EU through CE

Your way to circularity: Value chain intelligence

A first step for companies is to get a thorough understanding of its environmental hotpots and how these can be resolved effectively. If companies understand where the ‘biggest bang for the buck’ can be made, they will be able to focus their efforts. To do so, many companies already implemented measurement, monitoring, and reporting of their value environmental impacts e.g. according the scope 3 GHG protocol or other means such as an ‘environmental P&L’ which uses monetized & consolidated environmental impacts.

Two examples of reporting value chain environmental impact. DSM reports its value chain GHG’s according the GHG scope 3 protocol. Philips reports its value chain impact by means of an ‘environmental profit & loss’ statement including also other environmental impacts. Despite the completely different nature of the companies, in both cases the majority of value chain impacts are ‘indirect impacts.’ Source: www.dsm.com and www.philips.com

Ecochain's supplier dashboard

To get insight into an organizations upstream environmental impact, Ecochain created a supplier dashboard.

This dashboard shows the environmental impact of all suppliers of products and services of a small catering company.

This catering company has around 375 suppliers with different total carbon footprints. In the dashboard you can zoom in into the most important suppliers. In this way a company can conclude which suppliers are responsible for most of the upstream impact.

The dashboard also shows which products or services are mainly responsible for the environmental footprint of a certain supplier. In the figure below this is illustrated for the 4 most important suppliers of the catering company: 1) meat supplier, 2) snack supplier, 3) vegetable and fruit supplier and 4) dairy supplier. Per supplier the average environmental impact of 1 kg of supplied product is shown. It can be seen the 1 kg of product supplied by the meat supplier has the highest carbon footprint (20.8 kg CO 2 -eq.), followed by the snack supplier (4.8 kg CO 2 -eq.), dairy supplier (1.7 kg CO 2 – eq.) and vegetable and fruit supplier (1.0 kg CO 2 -eq.). For the meat supplier the ‘rundvlees’ (in English: beef) is responsible for ~75% of the total footprint per 1 kg. Whereas for the vegetable & fruit supplier it can be seen that a lot of different products contribute to the footprint.

What are the challenges?

Measuring the impact of an entire value chain is an emerging discipline. A number of barriers exist that make capturing and evaluating an organization’s value chain impact challenging due to a number of issues:

Complexity & specialism

Various standards describe methodologies in detail such as the GHG protocol and ISO14044/44. Compliance to these standards can be a time consuming & tedious task for non-specialists. Larger corporates commonly have in-house specialists to do the job, but this may not be feasible to smaller organizations.

Supplier data gathering effort

Capturing supply chain data can be quite an investment to many companies. To get an accurate picture of the (upstream) impact, companies need data from their suppliers who are often quite reluctant to share data. Moreover, the number of suppliers that larger corporates have is extensive. Hence, the effort to gather environmental data with suppliers can become massive if wrong decisions are made with respect to the model used. Companies need to make smart choices when it comes down to accuracy as well as effort (e.g. to gather data from suppliers versus the use of data from database). The majority of the effort needs to go to the environmental hotspots that make up for the majority of the impact.

Downstream data gathering effort

The same holds for the downstream impacts. Especially in B2B markets, it can be quite a struggle to get accurate results for the downstream impacts due to the high number of different use and end-of-life scenarios. And in many cases, companies simply do not know in which products their semi-finished goods end up.

How Environmental Intelligence can help you

Scope 1, 2 & 3

Measure your company-wide emissions for scope 1, 2 and 3

Your direct, indirect and supply chain emissions are key metrics for your sustainability strategy. Report accurately and find ways to reduce efficiently.

Company Scope
Portfolio Comparison

Compare the emissions of your entire product portfolio

With Ecochain, you can compare the footprint of all your products all at once. Identify the biggest leverage to reduce the emissions of your company, efficiently. We call this approach Activity-based Footprinting.

Portfolio Comparison
Life Cycle Inventory

Built on the world's most advanced LCI databases

With Ecochain, you can leverage ecoinvent and many other leading Life Cycle Inventory (LCI) databases.

Impact Flows

Generate impact flows and find hotspots, visually

With our visual impact flows, you can identify key components to reduce the impact throughout your value chain.

Impact Flow
ISO Norms
Compliant to ISO and EU Standards

Following standards and regulations to future-proof your business

Ecochain facilitates the performance of LCA studies according to ISO 14040/ISO14044, ISO 14025 and EN15804.
Ecochain is a member of the Technical Advisory Board of the PEF/OEF initiative of the European Commission, and as a fully result up-to-speed with these developments. Criteria for “PEF ready” LCA software are currently under discussion, and as soon as they become available we will implement them in our software.

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Want to get hands-on? Get our in-depth supply chain whitepaper.

How do you implement circularity throughout your value chain? In this whitepaper, we provide you with the in-depth knowledge you need to implement circularity today.

Supply Chain Whitepaper