Decarbonizing Value Chain
Updated:
July 9, 2024
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Overview
This lesson delves into the concept of value chain decarbonization, emphasizing the importance of reducing GHG emissions throughout a product or service's entire lifecycle, exploring additional strategies beyond those in the previous lesson, and highlighting the significance of addressing scope 3 emissions to position organizations as industry leaders in the context of comprehensive value chain decarbonization.
Value chain decarbonization acknowledges that GHG emissions are not limited to the direct operations of a single organization, but are embedded in the broader network of suppliers, customers, and stakeholders involved in producing and consuming.
Decarbonizing value chains involve reducing GHG emissions across a product’s or service’s entire lifecycle, from the extraction of raw materials to the end-use and disposal. In addition to the strategies listed in the previous lesson (Energy Transition and Efficiency, Transportation and Logistics, Closed-Loop Economy, and Supply Chain Engagement), the following should also be considered when decarbonizing across a company’s value chain:
- Ensuring raw materials used in production come from sustainable sources
- Waste reduction and recycling, which decreases the need for new raw materials
- Conducting a lifecycle analysis to locate emission hotspots and determine where to focus decarbonization efforts
- Innovative technologies such as carbon capture and storage
Identifying and implementing emission reduction opportunities at every stage of the value chain, including production, transportation, distribution, consumption, and waste management, provides ample opportunity for organizations to analyze and pinpoint carbon “hotspots” in their scope 3 emissions.
Scope 3 emissions are crucial to this topic because these emissions encompass all indirect emissions occurring upstream and downstream of an organization’s operations. In other words, you cannot discuss decarbonizing value chains without recognizing the crux of the issue, scope 3 emissions.
When organizations include scope 3 emissions in their value chain decarbonization discussions, they gain a competitive advantage by positioning themselves as industry leaders, comprehensively navigating value chain risks by addressing all three scopes, and aligning with long-term climate change goals through compliance with global governmental regulations.
Quadial Inc. uses Persefoni’s Collect component to request scope 1, 2, and 3 emissions from any portfolio companies or suppliers and Net Zero Navigator to align decarbonization actions to the company’s decarbonization targets and conduct scenario planning.
