Data-Driven Sustainability: Supply Chain Analytics for Scope 3 Emissions Reduction
Organizations with effective sustainability initiatives often share one key characteristic: they are dedicated to reducing their Scope 3 emissions.
Why? Although Scope 3 emissions are “indirect” emissions, meaning that a company doesn’t produce them directly, they often constitute the majority of emissions emitted when considering a company’s sourcing, operations, and product distribution. According to a June 2024 report from the Boston Consulting Group, Scope 3 emissions from within an organization’s supply chain are 26 times higher than that organization’s operational emissions.
But how can a company reduce Scope 3 emissions when these are the type of emissions that the company might not have any control over? This is where supply chain analytics comes into play. Supply chain analytics is the art of using supply chain data — including emissions data — to garner insights and develop actionable steps.
And this is what Searoutes does. We have developed API tools that cull and analyze large amounts of emissions data and other data inputs to produce insights that enable companies to see where further emissions reductions can occur along their entire supply chain.
Scope 3 Emissions: A Vital Topic in a Changing Supply Chain
As we’ve explained above, Scope 3 emissions are called indirect emissions, meaning that these are emissions that occur in operations outside of a company’s purview. This includes transportation emissions that occur when shipping a product to its final destination.
One major benefit to reducing Scope 3 emissions is that an organization will reduce its carbon footprint in turn. Consumers are keenly interested in ensuring that organizations are dedicated to lowering their emissions profile, and that includes making earnest efforts to reduce Scope 3 emissions. Governments, meanwhile, are starting to hold companies accountable for reducing their Scope 3 emissions; the European Union’s emissions trading system (EU ETS) is one example of government regulation that compels companies to reduce their Scope 3 emissions from their supply chains.
However, part of the challenge in reducing Scope 3 emissions is that measuring and managing Scope 3 emissions can be more complex and challenging than measuring other emissions types. The amount of data and data sources that must be tracked can seem daunting–Scope 3 emissions include supply chain emissions but they might also include emissions that occur during the extraction and manufacturing of raw materials, for instance. Because of these challenges, Scope 3 emissions can be much more difficult to limit.
That said, Searoutes and other data analytics providers have been working hard to develop solutions that tackle these challenges head-on and over time so that other supply chain stakeholders may benefit.
Are Supply Chain Analytics the Key to Reducing Scope Emissions?
Deploying supply chain analytics can result in tremendous benefits when seeking to manage and reduce Scope 3 emissions. Supply chain analytics allows organizations to gauge emissions output, both in real-time and through projections via the analysis of historical trends.
And while there are plenty of variables to consider when measuring an organization’s Scope 3 emissions, any progress toward identifying more areas to reduce Scope 3 emissions is helpful. Organizations can not only deploy emissions reduction strategies while monitoring their own supply chain, but they can also influence suppliers and vendors to do likewise.
Three Key Ways Supply Chain Analytics Contributes to Scope 3 Emissions Reduction
Deploying supply chain analytics to reduce Scope 3 emissions is an effective approach because of the systematic way data analytics tackles problems. Analytics tools can glean through massive amounts of data to find the insights you need to create actionable steps. Here are just some of the ways analytics tools can help organizations find ways to slash Scope 3 emissions.
Comprehensive Emissions Monitoring
Analytics tools can provide visibility into the volume of Scope 3 emissions being emitted across the supply chain. These tools can collect accurate data from various sources, such as transportation logs, supplier reports, and product lifecycle assessments, and then analyze that data to identify emission hotspots. Used in tandem with historical data, analytics tools can also spot trends, enabling organizations to see how modifications to the supply chain could lower the emissions output.
Data-Driven Insights for Targeted Actions
In addition to discovering and analyzing trends, analytics tools can also identify inefficiencies and guide emissions reduction strategies. The insights gleaned from the analytics tools can help organizations develop tangible follow-up actions such as choosing lower-emissions suppliers and optimizing transportation routes. Having this data facilitates decision-making and paves the way for companies to better align with their goals for sustainability.
Continuous Improvement and Reporting
A major benefit of some analytics tools is their ability to factor in real-time data and performance metrics. This allows organizations to adjust or fine-tune their operations so they can realize the full potential of emissions reductions. Analyzing real-time and historical data can also help companies assess the impact of their sustainability initiatives.
Analytics tools also enable organizations to develop effective reporting strategies where they can communicate their achievements clearly and show that they are meeting regulatory standards.
Searoutes: Leveraging Data Analytics to Streamline Scope 3 Emissions Reduction
If an organization is ready to get serious about managing Scope 3 emissions, Searoutes has the API tools to help organizations do it all: comprehensive emissions monitoring, data analysis, and data reporting.
Searoutes’ CO2 API can bolster organizations’ emissions monitoring capabilities by accurately calculating carbon emissions along the length of the supply chain. For those wanting visibility into which routes might offer the most opportunities for emission reductions, our Routing API can help determine what options companies have. Our Vessel API meanwhile enables companies to get a comprehensive view into individual vessels’ emissions performance, factoring conditions such as average speed and route conditions.
All three of Searoutes’ API tools can empower organizations to work toward and achieve their sustainability goals.
Take the next steps to manage Scope 3 emissions
As the focus on sustainability intensifies, managing Scope 3 emissions has become a critical challenge, representing over 70% of a business’s total carbon footprint. Supply chain analytics play a pivotal role in addressing these emissions. By providing comprehensive emissions monitoring, data-driven insights, and continuous improvement strategies, analytics tools help businesses accurately measure, manage, and reduce Scope 3 emissions.
Searoutes offers advanced, data-driven solutions via emissions monitoring, route optimization, and vessel data insights to support these efforts. Contact us today to learn how you can bolster and strengthen your organization’s sustainability initiatives and effectively reduce Scope 3 emissions.