The full value chain approach to tackling scope 3

At the recent Scope 3 Innovation Forum in Amsterdam, leaders from across a range of industries participated in a series of interactive roundtable discussions. The sessions addressed a wide range of pressing issues related to scope 3 emissions: from circularity and climate risk to supplier engagement and procurement incentives.

Here are some of the key points of discussion.

Engaging upstream suppliers remains a complex task due to limited leverage and fragmented relationships. Suppliers are often confident they won’t be replaced, reducing their responsiveness to increasing sustainability demands. 

Standardising data collection methodologies is also a challenge, and participants highlighted the importance of capacity building, roadmapping and setting clear targets. Recognition emerged as a key non-financial incentive to ensure suppliers feel valued and motivated.

The Corporate Sustainability Reporting Directive (CSRD) was once seen as a strong regulatory driver for emissions data collection. However, recent regulatory changes and the Omnibus have brought about uncertainty, diminishing its impact. Attendees described the CSRD as more of a toothpick than a stick, noting that its power to encourage corporate action has decreased.

Traceability and transparency were highlighted as critical across all decarbonisation strategies, though some flexibility is needed to accommodate emerging markets and standards. For service providers, consumer involvement is key to refining specific use cases and improving effectiveness. 

While some participants questioned whether insetting offers only short-term value, most agreed that sector-level guidance is needed to drive consistency and enable scalable interventions. A blend of solutions remains necessary for meaningful impact.

Participants agreed that the current financial incentives for enhancing supply chain circularity are insufficient. These incentives could range from bonuses for creating circular products to rewards for customers who recycle more materials. Although customers may bear higher costs in the short-term, the benefits and cost-savings will be felt in the long-term. 

Data is critical here – tools like the Digital Product Passport can improve visibility across the supply chain. However, these are not yet available across all sectors. Expanding such regulations is essential to strengthen circularity through enhanced transparency.

Participants acknowledged a common disconnect between sustainability teams and procurement functions. Supplier engagement should be recognised as a strategic form of supply chain investment. Given the wide scope of procurement, this integration must avoid conflicting priorities. 

A sector-centric approach was recommended to raise the baseline across all suppliers. Incentives - or “carrots” – such as preferred payment terms and contract duration should be balanced with performance expectations – or “sticks” – tied to clear targets and activities.

Discussions around climate risk focused on both mitigation and adaptation strategies. Attendees emphasised the need for a just transition: one that puts people and communities at the centre. They agreed that the transition cannot be a one-size-fits-all approach and must reflect sector-specific needs. There must be a balance between environmental goals and social equity, as sacrificing livelihoods for environmental gain is not sustainable.

As new methodologies like carbon pricing emerge, they bring both promise and uncertainty. While carbon pricing can incentivise decarbonisation, it also risks penalising suppliers who fall behind. 

Participants discussed the need to strike a balance - driving change with urgency while ensuring mechanisms are fair, transparent, and clearly communicated. It’s a question of precision versus pace, and we can’t let perfect get in the way of better.