Role of Supply Chain Emissions in Decarbonization and ComplianceAntonio Fernandez
AUTHOR(S): Marina Monciatti, Andrei Marcu and Michael Mehling
Climate policy in the EU has so far lacked a holistic view on how supply chain emissions are addressed and accounted for. In the EU, the main legislation which currently governs its climate ambition and corporate compliance are focused on Scope 1 emissions, and to some extent on Scope 2 emissions. At the same time, companies are facing growing pressure from asset owners, employees, lawmakers and activists to reduce emissions across their entire value-chain (e.g. TCFD, SBTi, EU Sustainable Finance Taxonomy).
In view of the growing importance of addressing supply chain emissions, ERCST has embarked on an exploration of the main issues and options regarding how to identify and measure these emissions, and what role they should play in the transition to a low-carbon future.
This report examines the conceptual and methodological issues around measuring, attributing and accounting for supply chain (Scope 3) emissions and explores policy options for incentivizing Scope 3 emissions reductions.