Driving Real Supply Chain Emissions Reductions: An Examination of Large Corporations and Common Scope 3 Strategies

As climate pressures intensify, companies are feeling the urgency to set and achieve ambitious carbon reduction targets. Scope 3 emissions, from a company’s upstream and downstream indirect activities, typically make up the vast majority of emissions, far outweighing emissions from energy usage (scope 1 and 2 emissions).

Supply chains are complex and elusive, and the associated emissions are equally as cumbersome.

As we near the end of the first wave of industry leading Fortune 100 and 500 companies setting targets, there are some valuable lessons to learn and heed as best practice.

It is important to note that the intention of this article is not to discourage companies from tackling scope 3 emissions, in fact, it is the opposite. We want to support companies by designing programs that are high impact and equitable, driving immediate carbon reductions and not requiring either the reporting company or companies in the supply chain to spend large portions of their sustainability budgets on reporting and data chasing.

Cumulative number of companies with science-based approved targets and commitments worldwide from 2015 to 2023. Image from Ian Tiseo, Statista, 2025.

Many organizations turn to the Science-Based Targets initiative (SBTi) as the “gold standard” for aligning corporate emissions reductions with a 1.5°C future. Companies utilizing this standard often adopt ambitious goals, such as reducing emissions 42% across scopes 1, 2, and 3 by 2030. To meet the scope 3 portion of this target, many large companies require their vendors to set similar goals and commit to SBTi standards. The underlying assumption is that if all companies collectively cut their baseline emissions in half, it would help maintain alignment with the 1.5°C climate target.

SBTi Supplier Engagement Guidance notes, “Supplier engagement targets offer a way to influence decarbonization efforts within companies’ supply chain when granular emissions data is challenging to track or unavailable. These targets focus on engaging a defined set of suppliers in the near-term to set their own science-based targets on all applicable scopes and categories.”

But is this approach really driving carbon reductions?

At first glance, the strategy seems sound: if a large portion of suppliers within a value chain commit to reducing their emissions by half, the collective result should be alignment with global climate goals. However, carbon emissions are a nuanced topic and carbon footprints vary widely from company to company. A corporation with numerous building locations might achieve a 50% emissions reduction by installing solar panels onsite at each location, which is a straightforward solution. In contrast, a professional services company, where 90% of  emissions stem from cloud storage and the purchase of employee computers, will face a much more complex challenge.

Setting a blanket “one-size-fits-all” requirement for all vendors regardless of size or industry is not equitable or effective. Companies may inadvertently burden smaller vendors, waste resources on administrative tasks, or fail to drive substantial carbon reductions. For many small suppliers, setting emissions targets and developing decarbonization plans can be prohibitively expensive, and may not prove to be the most effective way to reduce carbon for their industry or company size.

This article explores the pitfalls of current supply chain engagement strategies and offers a roadmap to allow scope 3 emissions programs to drive real, measurable change—efficiently and equitably.

Reevaluating Supply Chain Engagement Strategies

For companies relying on supplier engagement targets—such as requiring all vendors to reduce emissions by 55% by 2030—there are critical challenges to consider.

Note that many supplier engagement programs can be effective, and the emphasis on purchasing power and influence here is targeted at mega corporations with an annual revenue of more than $1 billion.

1. THE ROLE OF MEGA RETAILERS IN EMISSIONS TARGETS 

A company that refers to its annual spend by vendor to identify suppliers to engage may make the common mistake of targeting a retailer, rather than a manufacturer or supplier. Mega retailers setting a carbon reduction target does not directly impact the actual product purchased.

For example, if Company A buys printer paper from a mega retailer, it may inadvertently focus on the retailer’s carbon reduction target rather than the manufacturer of the paper itself. This creates an indirect and lengthy connection between Company A’s carbon reduction efforts and the actual environmental impact of the printer paper. Will the retailer’s target indirectly encourage the paper manufacturer to switch to producing a lower carbon paper product? Possibly, but this is a long and inefficient path to achieve meaningful change.

Mistake #1: Company A Targets Mega Distributor Instead of Actual Supplier

2. TIME CONSUMING TARGET SETTING VS. INSTANT PURCHASING POWER

Continuing with the printer paper example, imagine Company A purchases paper directly from the manufacturer. If Company A follows a supply chain engagement target (aligned with the current requirements of one of the biggest tech companies), it would require the paper manufacturer to measure its scope 1, 2, and 3 emissions, develop a decarbonization plan, set reduction targets, engage its own supply chain, track progress, and ultimately cut emissions by 55%. This process could take five years or more.

Alternatively, Company A could use its purchasing power to switch immediately to paper made from 100% recycled materials.

• In the supply chain engagement scenario (Approach 1), the paper company may decide to cut out non-recycled products to meet emissions reduction goals. However, what if those non-recycled products are their top sellers, driving most of their revenue? Would the company still discontinue them, even at a financial loss?
• In the purchasing power scenario (Approach 2), if Company A and others consistently favor their products from recycled materials, the paper manufacturer would naturally shift its production to meet growing demand. This will help the company transition to a low carbon economy.

3. “LIBERTY MEANS RESPONSIBILITY. THAT IS WHY MOST MEN DREAD IT.” -GEORGE BERNARD SHAW

The above example highlighted a simple emissions reduction scenario by comparing products made from recycled versus virgin materials. But what happens when the vendor is a small IT Consulting firm with under 50 remote employees or a small landscape architecture firm designing exterior spaces for a large corporation? For professional services companies like these, an average of 90% or more of their emissions typically come from their own purchased goods and services.

With a supply chain engagement target, the large corporation shifts the responsibility for sustainable procurement onto these smaller vendors, who often have far less capital and purchasing power. How instead could the large corporation work with micro suppliers to design more sustainable projects and systems with innovative materials?

For example: Let’s revisit the landscape architecture firm. Eighty percent or more of its emissions stem from ongoing purchasing such as office supplies and employee computers. Should this small company focus its limited sustainability resources—perhaps only $2,000, a number we hear often—on tracking and reporting emissions or chasing more accurate vendor data? These activities alone could consume its entire budget, leaving no funds for research and development, staff training, or exploring low carbon design solutions for projects.

This is a common occurrence. Just this year, one prominent technology company referred small to medium suppliers to report emissions using two software companies that charged upwards of $2,000-$6,000 per submission, giving those suppliers less than two months to submit (and pay). For a small business, this type of unexpected expense can be devastating, and almost certainly removes the possibility of further spending on climate action. Importantly, for those who do not care as deeply about mitigating climate change as others, it can create ill-will toward the climate action movement, influencing our communities to re-frame a business opportunity to contribute positively to society as a costly compliance annoyance.

A recent study from the Imperial College London, published August 8^th, 2024, found that “73 percent of surveyed EU citizens said the environmental impact of a product is ‘very important’… they often fail to act on these principles.”

Crafting a More Effective Scope 3 Strategy

To create meaningful and impactful scope 3 reductions, it is essential to focus on strategic approaches that align with targeting high-emission sectors, focusing efforts on the necessary and useful data, and tailoring solutions to a company’s unique footprint. Here are key strategies for real change.

1. TARGET HIGH-EMISSIONS SECTORS

High-emissions sectors such as building materials and data centers should be prioritized for scope 3 strategies. These sectors have higher emissions per dollar spent than professional services or others. While professional services’ targets may not lead to immediate or drastic industry changes, ambitious requirements in these high-emissions sectors can create decarbonization opportunities for this sector, driving the market towards more sustainable materials and products.

If a company is trying to reduce remissions by 400 MTCO2e, should these two groups of vendors be given the same requirements and targets? 

2. ALIGN DATA IMPROVEMENT WITH PROGRESS

“You can’t manage what you don’t measure” is a phrase we hear at Brightworks time and again in the quest for understanding the true and actual carbon emissions of a company. While this statement is true—to understand impact, a baseline is paramount—the last goal should not be to capture a 100% accurate product or supplier specific emissions factor for every single line item purchased within a year. Instead, focus on implementing these reduction-oriented policies first, or in tandem with data improvement efforts:

• Internally: Set preferred purchasing standards for low carbon products by prioritizing education and research into alternative products.
• Suppliers: Influence vendor decisions by specifying product requirements such as locally sourced or recycled materials.
• Policy Example: A large tech company requires vendors to measure and reduce commute emissions (e.g., vendor employee travel to tech company’s campus). To reduce emissions, the vendor will look for accurate data including specific mileage and vehicle information, and look for ways to incentivize staff to use alternative transit methods such as buses or trains. Instead, the tech company could reduce requirements for vendors to meet onsite or offer EV pickup or shuttle services for local vendors.

Many companies we speak with are stressed about the enforcement of such policies and potential risk involved to their business in doing so. Enforcement does not have to mean you will stop working with suppliers who do not comply. We like what Nobel-prize winning economist Elinor Ostrom offers on creating and enforcing graduated sanctions for rule-breakers in her classic text Governing the Commons. As she highlights, incentives for your suppliers tend to work even better. It’s worth noting here that incentivizing suppliers and driving market change works well for large companies spending significant money with vendors. For smaller companies, alternative methods of engagement and policy development will need to be explored.

3. MOVE AWAY FROM ONE-SIZE-FITS-ALL STRATEGIES

Tailored solutions are more effective than one-size-fits-all strategies. For example, take the landscape architect whose footprint largely stems from purchases like office supplies and computers. Tracking emissions annually and engaging with their supply chain is costly and time-consuming for a small company with no dedicated sustainability staff. Instead, the large reporting company could invest in a low carbon design for a project. This could include using innovative recycled materials or native plants with high carbon sequestration potential. Let the large corporation help the landscape architect to allocate their sustainably budget to these efforts, rather than only the paperwork of annual reporting.

By supporting these sustainable initiatives, large companies can help smaller vendors gain valuable experience and integrate these efforts into their standard practices. This creates a ripple effect, where the vendor can use their new knowledge to implement low carbon solutions for future clients, thereby amplifying impact.

Addressing Scope 3 emissions is essential for achieving meaningful climate impact. By focusing on crafting more effective strategies, companies can drive real progress toward their carbon reduction goals.

For more information on how your organization can develop a practical and effective emissions measurement and reduction strategy, reach out to Erin Hocking, Corporate Reporting & Strategy Service Lead at Brightworks Sustainability, here.

Written by Erin Hocking, Corporate Reporting & Strategy Service Lead, Brightworks Sustainability 
Edited for clarity by Sunni Wissmer, Market Engagement Lead, Brightworks Sustainability and Corey Hastings, Marketing Consultant
Graphic Support by Olivia Bindon, Sustainability Consultant, Brightworks Sustainability