Ms. Serena Mak CESGA, Honorary Secretary & Board Governor of Friends of the Earth (HK)
For a company’s greenhouse gas (GHG) emissions, “Scope 3” (or value chain emissions) often represent the largest portion . Yet these indirect emissions can be the most difficult to measure and cut down. At the recent Rethink conference, I had the fortune to moderate a panel with industry practitioners to explored the challenges and hear them share their experiences on tackling this topic.
Here’s a few key takeaways that resonated through the conversation with Fabrice from Palo IT, Athena from China Overseas Land, Sam from Reset Carbon, and Dipjay from Adidas.
80/20 rule applies when it comes to scope 3 emissions too
When it comes to measuring and monitoring scope 3 emissions, the 80/20 rule still works – i.e. conducting a materiality assessment will bring insights and make the topic much less daunting. Sam from Reset Carbon advises focusing on the hotspots, prioritizing areas where reductions will have the greatest impact and where your organization has the most influence. Also note imperfection is understandable too – it is important to start somewhere.
Engagement with stakeholders with incentives – the carrot, and the stick
Dipjay shared how Adidas engages its global supply chain in a staged approach. For initiatives that are feasible today and have an attractive business case, suppliers are given a set of environmental best practice guidelines to benchmark and follow. Where initiatives require a modest investment and hence a more rigorous testing of business cases, suppliers that takes the investment will be more favorably rated in the overall supplier scoring mechanism.
One key thing I took away is how Dipjay emphasized the importance of treating suppliers as partners, “the relationship between a supplier and a brand is like a family”.
Development of digital enablers will be a lever to scope 3 emissions monitoring
Fabrice highlighted the importance of starting small with scope 3 reporting, focusing initially on a few key suppliers rather than attempting to cover all categories and geographies simultaneously (this is 80/20 rule + digital solution combined). The approach should be to start small, prove value, and then scale progressively. Tools such as IoT for real-time data, or API-based data collection platform, are existing solutions that can be deployed, even with more sophisticated tools like blockchain.
Collaborate Through Industry Partnerships
Athena from China Overseas Land underscored the power of collaborating with industry partners to tackle scope 3 emissions, as your scope 3 is someone else’s scope 1 and 2. By working together to engage common suppliers, competitors can amplify their impact, with industry associations serving as neutral facilitators. China Overseas Land has successfully employed green leases and smart metering to align incentives with tenants and drive emissions reductions.
Most panelists spoke about the power of partnerships. From an industry-wide data sharing platform from Fabrice, to tenant engagement programs from Athena, then to real estate decarbonization initiatives shared by Sam, and to apparel sector’s industry initiatives shared by Dipjay – it is very apparent to me that a broad topic such as scope 3 emissions, would be most effectively tackled on industry-wide basis. After all, the challenges and levers that companies face in this topic in the same industry would likely be quite similar.
Shift the Mindset
Panelists acknowledged that scope 3 reporting can seem daunting but encouraged the audience to see it as an opportunity. By approaching value chain partners with curiosity and an open mind, companies can uncover inefficiencies, show innovation, and build trust. Decarbonization is a team sport requiring perseverance and cooperation.
I hope the audience took away practical tips to begin measuring their scope 3 footprint, engage suppliers and customers, and tap into emerging digital solutions.
Sustainability is a Team Sport
The Rethink forum provided a valuable opportunity to connect with peers to share challenges and best practices.
I quoted this from Dipjay a few times – and maybe as I have also shared in another forum, it takes a village to move the needle on sustainability. It’s great to see the Rethink forum evolving and this year I can see many solution providers from IoT to data visualization and to showcasing some newer technologies. Really looking forward to see the growth of the sustainability village!
