When it comes to managing pollution produced by an organization, simply reducing direct emissions is not enough. It is also crucial to address the pollution generated by suppliers, known as Scope 3 emissions in the context of greenhouse gas pollution. This includes emissions from organizations contracted for services or supplies.
Supply chain and contractor management present unique challenges compared to internal organizational management. In our book “Management Fundamentals,” we highlight the importance of effectively managing contractors, which can be more complex than many managers realize.
Efforts by companies like Walmart and Microsoft to require suppliers to reduce carbon emissions reflect a growing trend towards sustainability in supply chain management. Microsoft’s directive for suppliers to use 100% carbon-free energy by 2030 demonstrates a commitment to reducing emissions throughout the supply chain.
Measuring and reporting Scope 3 emissions poses challenges due to data quality and availability issues across the supply chain. Engaging stakeholders and working with suppliers will be crucial for accurate measurement and reduction of emissions.
Overall, managing Scope 3 emissions is essential for responsible contract management and aligns with best management practices in today’s environmentally-conscious world. It is part of a larger trend towards sustainability in organizational management.
