For businesses today that are trying to be more environmentally conscious, managing the carbon emissions in their supplier chains can be a significant issue. Indirect or Scope 3 emissions represent a major problem that companies have to overcome, but fortunately, Elite Asia’s ESG Solution is on hand to help in the development of effective strategies to deal with this crucial aspect of running an organisation.
The Importance Of Managing Carbon Emissions In Supply Chains
Reducing carbon footprints has never been more crucial, and when it comes to businesses, the importance should never be underestimated. Yet, while companies can implement initiatives to manage their own operations in order to cut Scope 1 and 2 emissions that they produce directly or through their owned assets, it’s more challenging to put steps in place to manage Scope 3 emissions that are produced by third parties like suppliers.
Carbon Emission Activities In The Supply Chain
Suppliers may produce carbon emissions in many ways, from their own production processes and energy consumption activities to the storage and transportation of goods to the business that is purchasing them. Yet all businesses now have a corporate responsibility to slash their carbon emissions as much as possible in order to protect our natural environment and reduce the negative impact on climate change.
Of course, managing carbon emissions serves a regulatory purpose, but it can also offer benefits to the organisation too. Demonstrating a socially and environmentally aware stance can improve the brand’s reputation and help it to achieve a better market position, while attracting more investors and shareholders who, themselves, value ethical and responsible practices.
Strategies To Manage Carbon Emissions For Suppliers
When it comes to managing carbon emissions for suppliers, there are a number of strategies that can be implemented.
For a start, there are now climate-related reports which are requested by authorities and organisations on a mandatory basis. Maintaining compliance with those report requests is crucial. Some countries are also now levying a carbon tax which is influencing suppliers to put more effort into managing their emissions. Singapore, Korea, and Japan are just a few of the nations that are implementing this option.
Collaboration is also absolutely vital between suppliers and companies in order to pinpoint where it’s possible to reduce emissions and to put initiatives in place to improve sustainability across the supply chain. This may be achieved by:
- Switching to optimised methods of transportation
- Using renewable energy sources
- Adopting up-to-date technologies to control emissions
- Educating consumers and staff alike to make more sustainable buying decisions and reduce all unnecessary travel
- Investing in more energy-efficient machinery wherever possible.
- Utilising tools to track, report, and evaluate throughout the supply chain.
The Role Of ESG Reporting in The Management Of Climate Risks
When companies invest in reliable climate-related reports and disclosures, they can set themselves on the path towards improved management of carbon emissions in their supply chain. Market participants will also be able to manage and price climate risks more effectively upon reading these ESG reports.
Elite Asia is on hand to assist with all your ESG reporting needs. Our comprehensive reports will provide your stakeholders with key information about the way your organisation manages and addresses all ESG issues, boosting its reputation while also ensuring you mitigate your potential risks and maintain regulatory compliance in the long run.