Decarbonising businesses does not mean ‘only’ reducing direct emissions from the company’s own or controlled sources. For a company that wants to contribute to the achievement of climate goals toward net-zero emissions, simply considering the activities under its direct control is no longer enough: the company must also address the entire environmental impact of its value chain. In fact, the indirect emissions of a company’s supply chain are on average 5.5 times higher than its direct emissions, mainly on account of the goods and services it purchases, which constitute the largest part of a company’s carbon footprint (data from CDP).
When a company addresses the emissions deriving from its supply chain, it gains the opportunity to create an impact on a volume of emissions much higher than the amount it would ordinarily reduce by focusing only on the decarbonisation of direct operations. This is a key opportunity for companies, including SMEs, to assert and demonstrate their climate leadership by encouraging other companies to follow good practices and reduce their carbon footprint, thereby promoting collective climate action.