Tackling Scope 3 Emissions: Collaborating With Partners to Cut Carbon

Climate change is no longer a distant threat, but a present reality that demands urgent and coordinated action. But as companies around the world step up efforts to reduce GHG emissions, a significant portion of their climate impact remains persistently elusive and hard to control: Scope 3 emissions. These are the indirect emissions that occur throughout a company’s value chain, including those generated by suppliers, product use, and even end-of-life disposal.

According to the CDP, Scope 3 emissions can account for up to 75% of a company’s total carbon footprint, on average. That means that even if a business makes significant strides in reducing emissions from its own operations and energy consumption (Scopes 1 and 2), it can’t truly claim climate leadership unless it tackles Scope 3. But since Scope 3 emissions are not within the direct control of said organization, they tend to be the trickiest to address.

This article explores the why, what, and how of reducing Scope 3 emissions through strategic collaboration with suppliers, customers, and partners.

Understanding Scope 3 Emissions

The Greenhouse Gas Protocol, the most widely used international accounting tool for government and business leaders, categorizes emissions into three scopes:

• Scope 1: Direct emissions from owned or controlled sources.
• Scope 2: Indirect emissions from the generation of purchased energy.
• Scope 3: All other indirect emissions occurring in the value chain.

Scope 3 emissions fall into 15 categories, including:

• Purchased goods and services
• Capital goods
• Fuel- and energy-related activities (not already included in Scope 1 or 2)
• Upstream and downstream transportation
• Waste generated in operations
• Business travel
• Employee commuting
• Use of sold products
• End-of-life treatment of sold products
• Franchises and investments

For many businesses, the largest chunks come from purchased goods and services and use of sold products, making collaboration across the supply chain essential.

Why Tackling Scope 3 Emissions Matters

Brand Reputation and Customer Expectations

Consumers are becoming more discerning. A recent Deloitte study found that a core group of consumers are willing to pay more for products that demonstrate a commitment to sustainability. Failing to address Scope 3 emissions as part of the strategy can open a business up to accusations of greenwashing, even if its direct operations are low-carbon.

Risk and Resilience

Moreover, understanding and reducing Scope 3 emissions isn’t just about reputation, it's about ensuring resilience and reliability. Supply chain disruptions caused by extreme weather events, carbon taxes, and resource scarcity can all pose major risks to production. Reducing emissions can build a more robust, future-ready value chain.

How to Collaborate With Partners to Reduce Scope 3 Emissions

1. Map Your Value Chain and Identify Hotspots

Before you can collaborate, you need to understand where your emissions lie. Tools like the GHG Protocol’s Scope 3 Evaluator can help you estimate emissions across all 15 categories.

Prioritize areas with:

• High emissions
• High influence/control over vendors
• Alignment with business priorities or customer values

Often, these hotspots include Tier 1 suppliers, logistics providers, and product design choices.

2. Engage Suppliers with Clear Expectations and Incentives

Suppliers are often responsible for a large portion of Scope 3 emissions, but many lack the data, incentives, or resources to address them. Help them succeed by:

• Including climate targets in procurement contracts
• Providing tools and training (e.g. how to report emissions data)
• Offering financial incentives, like preferred supplier status or cost-sharing for upgrades
• Collaborating on pilot projects to test new materials or processes

One example: Walmart’s Project Gigaton, launched in 2017, aims to cut one gigaton of emissions from its supply chain by 2030. It invites suppliers to set their own science-based targets and offers tools and recognition for doing so 

3. Adopt Product Lifecycle Thinking

Scope 3 emissions don’t end when a product ships. Forward-thinking companies design products with:

• Lower-carbon materials
• Longer lifespans
• Repairability and recyclability
• Energy-efficient performance during use

Apple, for instance, has redesigned its packaging and product components to reduce emissions from both manufacturing and end-of-life disposal, targeting a net-zero supply chain by 2030. 

4. Improve Data Transparency and Traceability

Many businesses struggle to get reliable data on Scope 3 emissions. To build trust and accuracy:

• Use standardized frameworks like CDP Supply Chain or EcoVadis
• Invest in digital platforms for real-time emissions tracking
• Encourage third-party verification of emissions data

Blockchain and AI are increasingly being used for traceability, particularly in food, fashion, and electronics supply chains.

5. Build Coalitions and Industry Collaboratives

No company can do this alone. Cross-sector partnerships allow for shared learning, collective bargaining with suppliers, and development of common standards.

Examples include:

• Cascale (formerly the Sustainable Apparel Coalition): A collaboration between brands, retailers, and NGOs to reduce environmental impact in fashion.
• Clean Cargo Working Group: Focuses on improving the sustainability of cargo shipping.
• Supplier Leadership on Climate Transition (Supplier LoCT): A platform to help suppliers set science-based targets and report progress  

These alliances help level the playing field so suppliers don’t face conflicting demands from different customers.

6. Support Low-Carbon Logistics and Transportation

Transportation is a major contributor to Scope 3 emissions. Solutions include:

• Consolidating shipments to reduce trips
• Switching to lower-carbon modes (e.g. rail vs. air)
• Partnering with logistics firms investing in electric fleets
• Using emissions data to make smarter route and mode choices

Companies like Maersk and DHL now offer carbon-neutral shipping options, often at a premium, but with growing uptake.

Overcoming Common Challenges

1. Data Gaps and Inconsistencies

The Challenge: Many suppliers lack the tools, expertise, or financial resources to measure their emissions precisely. This leads to data that is incomplete, inconsistent, or non-standardized, making it difficult for companies to build a clear Scope 3 emissions profile.

Solutions: Begin with spend-based estimates, which apply standard emissions factors to the dollar value of purchased goods and services. While less precise than activity-based data (e.g. kg of raw materials or kWh of electricity used), this method offers a scalable starting point. 

• Start with proxies: Use platforms like the GHG Protocol Scope 3 Evaluator or Ecoinvent databases to calculate emissions based on purchasing records.
• Provide a standardized reporting template: Give suppliers a simple spreadsheet or online form to report on key metrics like energy use, materials, and logistics.
• Partner with platforms like CDP Supply Chain or EcoVadis, which allow suppliers to submit emissions data once and share it with multiple customers, reducing reporting burden. 
• Recognize effort over perfection: Prioritize continuous improvement and reward transparency, even if the data is initially rough.

2. Low Leverage Over Upstream Suppliers

The Challenge: It’s often difficult to influence suppliers that are farther up the supply chain – especially Tier 2 or Tier 3 suppliers, who don’t have a direct contractual relationship with the buyer and may not even be aware of the buyer’s sustainability goals.

Solutions: Use Tier 1 suppliers as multipliers to cascade sustainability expectations. Additionally, participate in industry initiatives that aggregate demand and create shared standards, allowing businesses to pool their influence and simplify the message reaching deeper tiers. 

• Integrated scorecards: Make sustainability performance a formal part of supplier evaluations. Tier 1 suppliers will often pressure their own suppliers to improve if their business depends on it.
• Leverage joint purchasing power: The Clean Electronics Production Network (CEPN) brings together tech companies like Apple, HP, and Dell to address common environmental issues across shared suppliers Additionally, the Responsible Business Alliance (RBA) provides a shared code of conduct and audit protocols that reach down to sub-suppliers.
• Transparency incentives: Offer preferred vendor status or longer contracts for suppliers that can demonstrate upstream emissions reductions.

3. Short-Term Cost vs. Long-Term Value

The Challenge: Reducing emissions in the value chain often involves upfront costs, including cleaner materials, upgraded processes, or reporting infrastructure. Suppliers, especially those operating on thin margins, may be hesitant to invest without clear, short-term economic incentives.

Solutions: Help partners understand that sustainability is not just a compliance burden but rather a strategic advantage that brings cost savings, resilience, and brand value. In short, shift the conversation from cost to value. Tactics to consider include: 

• Shared savings models: Instead of requiring suppliers to front all the costs of sustainable upgrades, companies can co-develop solutions that benefit both parties financially. For example, a buyer and supplier might agree to switch to a recycled input material that costs more upfront but reduces total product cost through lower shipping weights or simpler packaging. Suppliers can receive a portion of savings generated, incentivizing process optimization. 
• Co-investment in innovation: Buyers can directly support partners in adopting cleaner technologies or practices that reduce emissions, especially when those investments would otherwise be out of reach. This could include providing low-interest financing or advance purchase agreements to help a raw materials supplier invest in low-carbon alternatives; funding pilot programs for initiatives like regenerative farming, sustainable packaging, or circular product design, with the expectation of scaling if successful; o offering technical support or R&D collaboration to improve the environmental profile of a shared product component.
• Brand elevation for suppliers: Suppliers that adopt low-carbon practices should be recognized and rewarded, not only with ongoing business but also with visibility and credibility in the market. This can involve featuring suppliers’ sustainability efforts in annual sustainability reports, product marketing, website storytelling, or promotional campaigns, or helping them certify or label products (e.g. via third party certifications) to appeal to eco-conscious buyers.

Final Thoughts

Scope 3 emissions can be daunting to manage because they lie outside of a company’s direct control. But that doesn’t mean the challenge is insurmountable. By coordinating closely with suppliers, customers, and industry peers, companies can build resilient, low-carbon value chains that not only reduce risk but also unlock innovation and long-term value. The climate crisis is a shared challenge, and tackling Scope 3 emissions is likewise a shared responsibility. The companies that succeed will be those that embrace collaboration and transparency – and bring partners and customers alike along for the ride. 

About Noda

Noda is a data and analytics company on a mission to make every building smarter, more efficient, and more sustainable. Recently ranked in the top 10 tech companies leading the charge on climate action, its AI-powered suite of products surface unique insights that empower real estate teams to reduce costs, decrease time spent on routine work, and find and act on opportunities to save energy and carbon. Discover how Noda's solutions can unlock the potential of your assets and accelerate the transition to net zero. Visit us at noda.ai to learn more.