More and more companies today understand the importance of having a positive impact on their environment and of serving a social purpose. For many organizations, simply maximizing profits has long ceased to be the sole focus. At the same time, however, businesses are facing increasing pressure from various stakeholders, be they customers, legislators or financiers.
In order to meet their own goals and those of the external stakeholders, companies need to become more committed and demonstrate progress made in meeting their sustainability goals in the areas of ecology, social issues and corporate governance/economics.
For businesses wanting to do more than just meet the minimum legal requirements, making their supply chain sustainable represents a central challenge. At the same time, however, it also offers the greatest opportunity to make a positive impact, together with business partners. A glance at the supply chain shows that the integration of ecology and social issues still represent two central challenges. These include, in particular, the measurement and communication of emissions, differentiated according to Scope 1, 2 and 3.
This shows that Scope 3 emissions for companies are also just well-managed Scope 1 and partly Scope 2 emissions of each individual company in the value-added chain. In simple terms: If everyone works on their Scope 1 emissions, it benefits everybody, since Scope 1 emissions from company X as an output are Scope 2 & 3 emissions for company Y as an input.
So in order to increase energy efficiency and reduce greenhouse gas emissions and negative social impacts in the supply chain, each actor in the supply chain needs strong IT capabilities to control their processes. The sum of each company's individually enhanced performance is thereby greater than the enhanced performance of the respective chain links.
Side note: The breakdown into Scope 1, Scope 2 and Scope 3 emissions originates from the Greenhouse Gas Protocol (GHG Protocol). This is a standard for measurement and communication of the greenhouse gas emissions that takes the entire value-added chain into consideration. Suppliers and customers are always involved in the production of goods and the provision of services. Greenhouse gases released by each economic partner are borne in part by all the companies that use the services of the other economic partners or receive payment for their own services from them. The idea runs through the entire value-added chain, from the extraction of the raw materials through to the use and ultimate disposal of products. The Greenhouse Gas Protocol distinguishes between direct and indirect emissions of greenhouse gases. The direct release involves all the gases that a company itself releases into the environment. Indirect emissions are the environmentally harmful gases released by business partners along the supply chain. Scope 1: Encompasses the direct release of environmentally harmful gases within your own company, e.g. combustion of gas Scope 2:: Encompasses the indirect release of environmentally harmful gases by energy suppliers, e.g purchased energy Scope 3: Encompasses the indirect release of environmentally harmful gases in the upstream and downstream supply chain, e.g. emissions due to business travel or purchasing
1. Providing data: Creating a “single source of truth”
Businesses wishing to report and manage their sustainability first need a database that is free from redundancy.
2. Indicator management: Harmonization and enrichment
The second step is to harmonize the data provided. This means that the relevant data is cleaned and enriched with additional data.
3. Performance transparency: Generating insights for greater sustainability
The data obtained now provides the basis for assessing the sustainability performance in the company.
4. Performance improvement and control: Initiating andpromoting measures
On the basis of this data, the company is now able to derive appropriate measures according to its strategy and goals.
5. Disclosure and communication: Sharing progress with stakeholders
The data obtained is communicated in order to inform the company’s relevant stakeholders.
6. Business partner integration: Using sustainability data from business partners
The sustainability performance data gathered can be used not only internally, but can also be shared with relevant actors in the supply chain. There is also the possibility of an upstream integration of business partners in order to ensure the holistic nature of the information in the supply chain.
We can therefore clearly see that sustainability has long since ceased to be a mere buzzword; current political developments are making it more relevant than ever. It is not just information from individual actors that counts, but that of all the actors in the supply chain. At Scheer we see that sustainability and digitalization are interdependent. The above-mentioned six IT capabilities enable companies to position themselves in the best possible way in the current and future market environment. This allows sustainability to be efficiently managed.
Scheer GmbH offers a wide range of sustainability services and tools for this. We can therefore find the right tools for you, depending on your existing sustainability strategy. However, we also provide support going beyond this in the initial identification of a sustainability strategy as part of a management consultancy.
Your contact person
Alexander NeskeExpert Chemicals & Pharma
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