The manufacturing sector is being urged to get its act together when reporting on actions to reduce its supply chain emissions, known as Scope 3 as a new report highlights that it is nowhere near the level it needs to be.
It follows the publication of a new Carbon Action Report by international business sustainability ratings provider EcoVadis and the Boston Consulting Group which reveals that only 2% of global businesses in the manufacturing sector, including those in the UK, have set a Scope 3 target and are on track or ahead of schedule to achieve it. The report concludes that low levels of action pose significant financial risks and a threat to national and global climate goals.
For manufacturing businesses in the UK, the report’s findings come as the British government is considering moving towards international sustainability standards and making disclosure of supply chain emissions mandatory – which is not currently the case in the UK.
Despite the very low percentage of manufacturing businesses being on track or ahead of schedule to achieve science-based climate targets for Scope 3 emissions, 59% do have a dedicated climate action team and companies were active in dealing with their supply chain emissions in such areas as supplier engagement (36%), monitoring in line with leading standards (32%), and setting an action plan to reduce emissions (43%).
On a global scale, the report revealed that ignoring supply chain emissions could cost companies across the board $500 billion in annual liabilities worldwide by 2030. At the same time it highlighted that investing in climate action for the supply chain could achieve up to three to six times return in investment through averting costs associated with future carbon-price regulation.
In the UK, on average across all industries covered by the report, there was a low level of action on supply chain emissions by companies, albeit some positive developments.
Findings highlighted:
- Only 14% of UK businesses are setting targets for supply chain emissions
- Circa two thirds of UK plc not reporting their supply chain emissions
- Positive progress being taken by UK businesses in taking action against supply chain in supplier engagement (52%), monitoring scope 3 emissions (48%) and appointing a dedicated climate team (72%).
- UK businesses are falling behind its European and major economy peers on some key metrics, including developing climate transition plans (26%), collecting primary data from suppliers (3%), and collecting product level data (5%).
Pierre-François Thaler, co-founder and co-CEO of EcoVadis, said: “These statistics should act as a wake-up call to manufacturing businesses in the UK.
“Across the world, the overall Scope 3 emissions performance is still very low for the manufacturing industry and nowhere near the level it needs to be if it’s going to meet its net zero ambitions. This exposes such businesses, including those located in the UK, to significant financial risks and puts national and global climate goals under threat.
“We are now at a pivotal point in business-led carbon action globally and dealing with supply chain emissions is an integral part of the equation. “Tackling supply chain emissions in the manufacturing sector, whilst undoubtedly complex and challenging due to their global nature, is key to securing the biggest environmental prize of them all, borne out by the fact that our report identified that the industry’s scope 3 emissions are ten times higher than it its scope 1 and 2 emissions.”
Added Thaler: “The financial risks of climate inaction are clear, but so are the opportunities. By addressing Scope 3 emissions, manufacturing companies can protect profitability while building a more resilient supply chain. The time to act is now, and the most effective place to start is with suppliers, where the majority of emissions lie.”
The report identified the five most impactful actions that manufacturing companies should take to move from awareness to action and accelerate supply chain decarbonisation:
- Supplier engagement: engage suppliers on ambition and need for climate action, and partner to launch joint emissions reduction activities.
- Emissions measurement: set up a greenhouse gas (GHG) inventory, with monitoring across operations (including product-level data as a late-stage action)
- Climate-aligned management team: establish a dedicated management team that sets and owns the net-zero agenda
- Climate transition plan: define a company-wide low CO2 climate transition plan aligned with the net-zero future
- Emissions reduction budget: allocate a dedicated budget to fund the net-zero transformation
The full Carbon Action Report can be viewed here: BCG + EcoVadis MEDIA-Carbon Action Report 2025.pdf
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