Companies that engage suppliers are 6.6 times as likely to have an upstream Scope 3 target

Companies that engage their suppliers are 6.6 times as likely to have an upstream Scope 3 target and a 1.5°C-aligned transition plan.

That is a finding from CDP and BCG's report "Scope 3 Upstream: Big Challenges, Simple Remedies", published in June 2024.

Three factors that stood out

The report examined more than 20 factors to see which were associated with companies having both an upstream Scope 3 target and a 1.5°C-aligned transition plan. Three stood out:

• Supplier engagement: 6.6 times as likely.
• A climate-responsible board: 4.8 times as likely.
• An internal carbon price used in decisions: 4.1 times as likely.

Associations, not causation

These are associations, not causation. A company that engages its suppliers may also differ in other ways: size, sector, resources or how long it has been working on climate. The figures do not show that starting a supplier program will, on its own, produce a target and a transition plan.

But they do point to where Scope 3 progress tends to start. Upstream emissions sit with suppliers, and a target on those emissions is hard to set credibly without knowing what suppliers emit and what they can change.

Why supplier engagement matters

For most companies, upstream Scope 3 is the part of the footprint they understand least and control least. Engagement is how that changes. It turns an estimate built from spend data into a working relationship with the businesses that actually produce the emissions.

The other two factors fit the same picture. A board that takes climate seriously gives supplier programs the mandate and budget to continue. An internal carbon price used in decisions makes the cost of emissions visible in procurement and investment choices, including which suppliers to work with and what to co-fund.

From engagement to reductions

Engagement is the starting point, not the end. Once a company knows where the emissions sit, the next question is who pays for the change. Co-funding verified supplier reductions is one way to move from surveys to tonnes, and insetting records those reductions inside the value chain. Insetting is not offsetting.

The CDP and BCG findings suggest that the companies furthest ahead on Scope 3 tend to be those already talking to their suppliers.