Tackling Climate Change Starts With the Supply Chain

For organisations across sectors, one reality is becoming unavoidable. Meaningful climate action cannot stop at internal operations. It must extend into supply chains, where the bulk of emissions often sit beyond a company’s direct control. These upstream emissions, commonly categorised as Scope 3 Category 1, now represent the centre of gravity for credible decarbonisation strategies.

As a result, procurement teams and buyers are asking suppliers questions that go far beyond basic compliance. Climate commitments, emissions measurement, net zero targets, and reduction plans are becoming standard parts of commercial discussions. In many cases, access to contracts, partnerships, and even financing increasingly depends on the answers.

According to Climate Essentials, this shift is creating a cascading effect across value chains. Large organisations are driving climate expectations down to thousands of small and medium-sized suppliers, many of whom are beginning their decarbonisation journeys for the first time.

 

Why Supply Chains Matter Most

 

Historically, carbon reduction efforts focused on operational measures such as renewable electricity, energy efficiency, and electrifying vehicle fleets. While these actions remain essential, they address only a fraction of total emissions for most organisations.

Data from CDP shows that supply chain emissions are, on average, eleven times higher than Scope 1 and Scope 2 emissions combined. This imbalance has fundamentally reshaped how organisations approach net zero planning. Without tackling Scope 3 emissions, climate strategies lack credibility.

Investor scrutiny, regulatory pressure, and consumer expectations have made transparency unavoidable. Buyers are now requesting emissions data and reduction pathways from suppliers as a matter of course. For many SMEs, this presents a challenge, particularly where resources, technical expertise, or reporting systems are limited.

Collaboration is therefore critical. Buyers that provide consistent frameworks, practical tools, and clear guidance are better positioned to support suppliers rather than overwhelm them. When designed well, supplier engagement becomes a shared effort to build long-term capability rather than a box-ticking exercise.

 

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Regulation Accelerates the Shift

 

Market pressure alone is no longer the primary driver. Regulation is rapidly reinforcing the need for supply chain disclosure.

The International Sustainability Standards Board has introduced global sustainability disclosure standards, which the UK has confirmed it will adopt. In the European Union, the Corporate Sustainability Reporting Directive requires companies to disclose Scope 3 emissions, making supplier data essential to compliance.

Even suppliers that fall outside the direct scope of these regulations are affected. As large companies and public authorities prepare to meet reporting obligations, they increasingly expect suppliers of all sizes to provide reliable and verifiable climate data.

This marks a clear transition. Climate reporting has shifted from a voluntary signal of good intent to a core business requirement. Organisations that can demonstrate credible progress are more likely to retain customers and win new contracts as climate criteria become embedded in procurement decisions.

 

A Practical Example From Local Government

 

One illustration of how collaborative supply chain decarbonisation can work comes from Surrey County Council. Recognising that a significant share of its emissions sat within its supply chain, the council moved beyond measurement to active supplier engagement.

Using Climate Essentials’ supply chain platform, more than 250 suppliers were supported to measure, track, and reduce emissions. The approach focused on accessibility, offering simplified tools, tailored reduction plans, and clear guidance on priority actions.

Within the first reporting cycle, the programme delivered a 30 percent improvement in reported supply chain emissions, largely driven by better data quality and coverage feeding into Scope 3 reporting. Suppliers became active contributors to the council’s net zero objectives rather than passive data providers.

The initiative has also fostered collaboration and shared learning, creating a model that other organisations and public bodies are now exploring.

 

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Building Capability Through Data and Community

 

Supplier engagement, when done well, extends beyond reporting. Climate Essentials has expanded this approach through its Net Zero Community, providing suppliers with ongoing access to webinars, expert resources, and practical toolkits. The goal is to embed climate action into everyday business operations rather than treat it as a one-off exercise.

The Surrey example highlights a broader lesson. Decarbonising supply chains requires shared responsibility, underpinned by data, accountability, and long-term partnerships. Buyers gain clearer visibility of Scope 3 emissions and can prioritise high-impact areas. Suppliers gain confidence, structure, and evidence to demonstrate progress to multiple clients.

As reporting standards converge and net zero targets tighten, expectations around supply chain transparency will continue to rise. Organisations that act early, building data-driven relationships with suppliers and integrating climate action into procurement, will be better placed to meet regulatory demands and strengthen resilience across their value chains.

 

 

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