Sustainability
are equally prone to increase. This is primarily the result of making more comprehensive efforts to measure such emissions, rather than emissions actually growing. The same investors, analysts, and other stakeholders who demanded that these companies disclose their Scope 3 emissions – to better assess their risk exposure and efforts to move towards net zero emissions – may become concerned if that data is taken out of context, without recognising the relative stage of Scope 3 emissions disclosure a company is in. However, our results also suggest that after about five or six years of reporting Scope 3 emissions, companies begin to show year-on- year improvements compared to firms that are at an earlier stage in this journey. “The number of firms currently disclosing these Scope
17 SUSTAINABLE DEVELOPMENT GOALS (SDG S ) TO TRANSFORM OUR WORLD
3 emissions is comparatively low”
face a paradox. On one hand, measuring and engaging with supply chain partners initially reveals a larger footprint. But over time, the same processes are necessary precursors to a wider transformation towards net zero. Firms must become comfortable with navigating this paradox by anticipating that their best efforts will initially make them look worse if taken out of context. They should prepare to manage this effectively with clear communications. Equally, outsiders must take this into account and avoid comparing Scope 3 emissions footprints without acknowledging that companies may be at different points on this journey.
Finally, companies should remember that their efforts will eventually enable them to demonstrate reductions in emissions, especially if they are calculated as changes over time rather than annual emissions footprints. We don’t yet know whether it is possible to speed up the journey, so companies don’t have to wait for five years before emissions are likely to fall. However, companies may be able to accelerate the wider transition towards sustainability by sharing the insights they have gained from measuring and reducing their own footprints. It is also likely that companies will experience similar tensions
in other complex and ambiguous sustainability areas of their supply chains, such as the Carbon Disclosure Project’s new annual and voluntary survey on companies’ plastic waste. If so, the lessons learned on Scope 3 emissions should help companies to manage their own and stakeholders’ expectations accordingly.
The 17 SDGs, represented by the icons above, lie at the heart of the United Nation’s Agenda for Sustainable Development. They were adopted by all UN member states in 2015, creating a blueprint for a global partnership to provide peace and prosperity for all. They recognise that ending poverty and other deprivations must go hand in hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and preserving our oceans and forests. Warwick Business School is committed to embedding the SDGs in its research, teaching, and day-to-day operations. Alongside each article in Core , you will see one or more of the 17 SDG icons to show you which goals the associated research aligns to.
It turns out that greater experience of Scope 3 emissions disclosure, combined with a broader approach towards engaging suppliers and customers in the process of measuring and reporting GHG emissions data, are also essential to drive performance improvements by identifying and implementing technological and organisational changes. In other words, companies
Find out more about research on Sustainability at Warwick Business School.
Sustainable Development Goals
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