Scope 3 Emissions: A Challenge for Supply Chain Sustainability

These indirect emissions, which occur throughout a company's entire value chain, represent the largest portion of the carbon footprint, but also the most difficult to track and reduce. However, understanding and addressing Scope 3 emissions has become essential for companies that want to reduce their environmental impact and respond to the growing expectations of their stakeholders.

What are Scope 3 emissions? 

The Greenhouse Gas Protocol, one of the most widespread international standards for measuring and managing greenhouse gas (GHG) emissions, divides emissions into three scopes: 

Scope 1: Direct emissions that come from activities controlled by the company, such as fuel combustion in its own facilities or vehicles. 

Scope 2: Indirect emissions related to purchased energy consumption, such as electricity, heat, or steam. 

Scope 3: Indirect emissions that occur throughout the company's entire value chain, both upstream (suppliers) and downstream (product use, distribution, end of life). 

Scope 3 emissions include a wide range of activities, spanning from the production of purchased goods and services, to material transportation, waste management, up to product use and end of life. They are therefore difficult to control, but constitute a fundamental part of a company's overall emissions balance. In many cases, Scope 3 emissions can represent more than 70-80% of a company's carbon footprint, making their monitoring and reduction crucial. 

Why are Scope 3 emissions so difficult to manage? 

Scope 3 emissions are not directly under the company's control, but depend on supplier activities, logistics processes, consumer behavior, and how products are managed at the end of their life cycle. This makes it difficult to: 

• Accurately measure emissions from each stage of the value chain
• Incentivize change in the practices of suppliers and external partners
• Create effective strategies to reduce emissions, considering the complexity and heterogeneity of the various actors involved 

However, companies that do not address their Scope 3 emissions risk losing competitiveness, reputation, and consumer trust. With increasingly stringent environmental regulations and consumers increasingly aware of the environmental impact of their choices, it is essential that businesses commit to reducing these emissions and improving the transparency of their activities. 

How to address Scope 3 emissions? 

To reduce Scope 3 emissions, companies must adopt a systemic and collaborative approach, involving all supply chain partners. Some of the main steps to address this challenge include: 

• Supply chain mapping: Understanding in detail where emissions come from is the first step. This means tracking every stage of the value chain and collecting data from the most distant sources.
• Collaboration with suppliers: Many companies are starting to collaborate closely with their suppliers to reduce upstream emissions, both through the adoption of more efficient technologies and the introduction of more sustainable procurement policies.
• Product and service innovations: Designing products that are more efficient in terms of energy consumption, easier to recycle, and have a lower environmental impact during their life cycle is another fundamental step.
• Emission measurement and tracking: Using advanced technologies to monitor emissions in real-time and identify areas where it is possible to intervene to reduce the ecological footprint.
• Communication and transparency: Clearly and transparently communicating progress to stakeholders through reports and certifications that demonstrate the company's commitment to emission reduction. 

In conclusion, although Scope 3 emissions represent one of the most complex challenges in corporate sustainability management, they are also one of the areas with the greatest potential for improvement. Through the adoption of innovative technologies, collaboration with suppliers, and more careful supply chain management, companies can make significant progress in reducing their environmental impact, thus contributing to a more sustainable world for future generations. 

The Commitment of FERCAM and Echo Labs by FERCAM & DACHSER in Reducing Scope 3 Emissions 

In this context of growing attention to sustainability, FERCAM and Echo Labs are engaged in concrete initiatives to address Scope 3 emissions. 

FERCAM has launched a series of projects to improve the efficiency of its processes and reduce emissions throughout the entire value chain. The company is working to optimize its transportation operations, investing in low-emission fleets, use of alternative fuels, and solutions to optimize energy consumption in logistics facilities. Additionally, FERCAM collaborates with its partners and suppliers, such as vehicle manufacturing companies and energy suppliers, to find synergies and act in concert, developing solutions that affect the widest possible slice not only of the supply chain but also potentially of what lies upstream and downstream from it. 

Echo Labs, the Group's social enterprise, is actively committed to reducing Scope 3 emissions through the upcycling of logistics materials, such as pallet wood and crates for artworks, transforming them into new products and thus reducing waste and emissions related to production. At the same time, the social enterprise promotes social inclusion by offering training and professional opportunities to political refugees and asylum seekers. This commitment has earned Echo Labs the UNHCR's Welcome Working for Refugees Integration award for two consecutive years, recognizing its contribution to refugee integration in the workplace.