Today’s procurement leaders are at the forefront of corporate climate action. As organizations strive for net-zero goals, they face a challenge that extends far beyond their operations: one deeply embedded across their value chains. As global rules about carbon reporting and supply chain responsibility get stricter, procurement and supply chain teams are now essential in reducing Scope 3 emissions, which is the next big step in fighting climate change.
The Greenhouse Gas Protocol notes that over 70% of a company’s overall carbon footprint can be attributed to Scope 3 emissions, which are produced indirectly through suppliers, logistics, and product consumption. This implies that without their suppliers on board, businesses cannot achieve net-zero targets.
A recent Reuters report highlights this urgency, introducing a new Scope 3 Action Code of Practice designed to close the global “Scope 3 gap.” Under this framework, businesses are required to reveal the amount of their supply chain emissions that they can credibly reduce, and they are only permitted to use carbon credits to offset up to 25% of the remaining emissions. It’s a clear message: the new standard is transparency, not tokenism.
The Science Based Targets initiative (SBTi) notes that for many companies, supply chain–related emissions are both the most difficult to reduce and the largest contributor to their overall footprint. On average, these emissions are 11.4 times higher than direct operational emissions. Accelerating decarbonization across supply chains is therefore among the most effective strategies for achieving global net-zero goals. To address this challenge, the SBTi’s Supplier Engagement Guidance recommends that companies set a quantifiable supplier engagement target—for instance, a defined share of spend or emissions—and ensure that engaged suppliers set their own science-based targets aligned with SBTi criteria, typically within five years.
The initial steps are setting priorities and mapping. According to the Greenhouse Gas Protocol, creating a strong Scope 3 inventory starts with determining which suppliers or categories are responsible for the greatest portion of emissions, whether by spending, activity, or carbon output.
However, to reach the engagement target, companies should do more than data collection. The Center for Resource Solutions’ 2023 Guidance for Supplier Clean Electricity Procurement highlights how companies and their upstream suppliers can jointly secure clean or renewable contracts. Doing so is framed as one of the most direct ways to cut emissions across the value chain and unlock energy-cost savings.
Collaboration, not compliance, drives real progress. Rather than enforcing strict requirements, the most effective initiatives focus on strengthening supplier capacity through training, knowledge sharing, and joint decarbonization planning. The SBTi guide notes that companies treating suppliers as strategic partners—rather than mere reporting participants—can build stronger, more transparent relationships that lead to faster and more credible progress on Scope 3 emissions.
Governments are also realizing that procurement may be a catalyst for climate action. According to the OECD’s 2024 report, Harnessing Public Procurement for the Green Transition, public procurement accounts for roughly 13% of GDP in OECD nations. This scale provides governments with significant power to promote climate alignment and supplier disclosure through Green Public Procurement (GPP) policies.
By incorporating climate factors, such as emission reduction objectives or the usage of renewable energy, into contracts and tenders, public buyers can set an example. These regulations not only change public supply chains, but they also give the private sector a clue as to what constitutes “responsible procurement.”
Reducing Scope 3 emissions is turning into a business necessity rather than a personal goal. Businesses will drive the next wave of sustainable growth if they take early action, make investments in supplier relationships, and match their plans with global standards.
The key lies with procurement specialists. These days, every sourcing choice has the potential to affect climate results. They may transform procurement from a transactional function into a force for actual environmental improvement by fusing data-driven insights with supplier collaboration.