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Decarbonizing Supply Chains:

A Scope 3 Playbook for India

WHITE PAPER

JANUARY 2024

In collaboration with

Kearney and Observer

Research Foundation

Contents

Cover Image: SvitlanaBelinska @GettyImages

reserved. No part of this publication may

be reproduced or transmitted in any form

or by any means, including photocopying

and recording, or by any information

storage and retrieval system.

Disclaimer

This document is published by the

World Economic Forum as a contribution

to a project, insight area or interaction.

The ﬁndings, interpretations and

conclusions expressed herein are a result

of a collaborative process facilitated and

endorsed by the World Economic Forum

but whose results do not necessarily

represent the views of the World Economic

Forum, nor the entirety of its Members,

Partners or other stakeholders.

Foreword

Executive summary

Introduction

1 Decarbonizing supply chains: Challenges in India

2 Scope 3 emissions reduction: A playbook for India

A holistic framework for Scope 3 emissions reduction

2.1 Step 1: Create Scope 3 baseline and develop data strategy

2.2 Step 2: Set science-based and business targets

2.3 Step 3: Develop upstream/downstream carbon reduction strategy

2.4 Step 4: Deﬁne organizational enablers

2.5 Step 5: Build roadmap and business case

3 Enabling the Scope 3 transformation: Ten imperatives for government action

Conclusion

Contributors

Endnotes

Decarbonizing Supply Chains: A Scope 3 Playbook for India 2

Foreword

In an era deﬁned by global interconnectivity and

growing environmental concerns, the imperative

to address climate change has never been more

pressing. The journey towards decarbonization is

not merely a moral or environmental obligation,

but is essential for securing the collective future

of humankind. The global challenge of climate

change calls for collective and concerted action,

transcending geographical boundaries and industry

sectors. At this pivotal juncture in human history, it

is evident that the path forward must be one guided

by sustainability and environmental stewardship. In

this endeavour, the role of businesses and supply

chains cannot be overstated.

This report by the World Economic Forum, Kearney

and Observer Research Foundation (ORF) presents

a vital blueprint for Indian businesses, policy-

makers and stakeholders. It underscores the critical

importance of tackling Scope 3 emissions, which

constitute a signiﬁcant proportion of a company’s

carbon footprint but often remain unaddressed due

to their complex, interconnected nature.

Speciﬁcally, given India’s rapid industrialization

and its burgeoning economy, the need to align

economic growth with environmental responsibility

has never been more pronounced. This report

reﬂects our commitment to equipping Indian

organizations with the knowledge, strategies

and tools needed to navigate the multifaceted

challenge of decarbonizing their supply chains.

We ﬁrmly believe that businesses in India can play

a transformative role in reducing emissions and

fostering a sustainable future for the world.

The journey to decarbonize supply chains can seem

daunting, but it is a journey that businesses must

undertake with conviction. By adopting the strategies

outlined in this playbook, companies can not only

mitigate environmental impacts but also unlock myriad

beneﬁts. These include cost savings, enhanced brand

reputation and the ability to thrive in an increasingly

environmentally conscious global marketplace.

We would like to extend our gratitude to the

dedicated researchers, experts and organizations

who have contributed their knowledge and insights

to this report. Their collective expertise has been

instrumental in creating a comprehensive guide

that is tailored to the unique challenges and

opportunities in India.

Samir Saran

President, Observer

Research Foundation (ORF)

Sriram Gutta

Head, India and

Deputy Head, South Asia,

World Economic Forum

Viswanathan Rajendran

Partner, Kearney India

Arun Unni

Partner, Kearney India

Decarbonizing Supply Chains:

A Scope 3 Playbook for India

January 2024

Decarbonizing Supply Chains: A Scope 3 Playbook for India 3

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IncollaborationwithKearneyandObserverResearchFoundationDecarbonizingSupplyChains:AScope3PlaybookforIndiaWHITEPAPERJANUARY2024CoverImage:SvitlanaBelinska@GettyImagesContentsForeword03Executivesummary04Introduction051Decarbonizingsupplychains:ChallengesinIndia112Scope3emissionsreduction:AplaybookforIndia15AholisticframeworkforScope3emissionsreduction162.1Step1:CreateScope3baselineanddevelopdatastrategy172.2Step2:Setscience-basedandbusinesstargets202.3Step3:Developupstream/downstreamcarbonreductionstrategy212.4Step4:Defineorganizationalenablers302.5Step5:Buildroadmapandbusinesscase333EnablingtheScope3transformation:Tenimperativesforgovernmentaction35Conclusion40Contributors41Endnotes42DisclaimerThisdocumentispublishedbytheWorldEconomicForumasacontributiontoaproject,insightareaorinteraction.Thefindings,interpretationsandconclusionsexpressedhereinarearesultofacollaborativeprocessfacilitatedandendorsedbytheWorldEconomicForumbutwhoseresultsdonotnecessarilyrepresenttheviewsoftheWorldEconomicForum,northeentiretyofitsMembers,Partnersorotherstakeholders.©2024WorldEconomicForum.Allrightsreserved.Nopartofthispublicationmaybereproducedortransmittedinanyformorbyanymeans,includingphotocopyingandrecording,orbyanyinformationstorageandretrievalsystem.DecarbonizingSupplyChains:AScope3PlaybookforIndia2January2024DecarbonizingSupplyChains:AScope3PlaybookforIndiaForewordArunUnniPartner,KearneyIndiaViswanathanRajendranPartner,KearneyIndiaSamirSaranSriramGuttaPresident,ObserverHead,IndiaandResearchFoundation(ORF)DeputyHead,SouthAsia,WorldEconomicForumInaneradefinedbyglobalinterconnectivityandeconomicgrowthwithenvironmentalresponsibilitygrowingenvironmentalconcerns,theimperativehasneverbeenmorepronounced.ThisreporttoaddressclimatechangehasneverbeenmorereflectsourcommitmenttoequippingIndianpressing.Thejourneytowardsdecarbonizationisorganizationswiththeknowledge,strategiesnotmerelyamoralorenvironmentalobligation,andtoolsneededtonavigatethemultifacetedbutisessentialforsecuringthecollectivefuturechallengeofdecarbonizingtheirsupplychains.ofhumankind.TheglobalchallengeofclimateWefirmlybelievethatbusinessesinIndiacanplaychangecallsforcollectiveandconcertedaction,atransformativeroleinreducingemissionsandtranscendinggeographicalboundariesandindustryfosteringasustainablefuturefortheworld.sectors.Atthispivotaljunctureinhumanhistory,itisevidentthatthepathforwardmustbeoneguidedThejourneytodecarbonizesupplychainscanseembysustainabilityandenvironmentalstewardship.Indaunting,butitisajourneythatbusinessesmustthisendeavour,theroleofbusinessesandsupplyundertakewithconviction.Byadoptingthestrategieschainscannotbeoverstated.outlinedinthisplaybook,companiescannotonlymitigateenvironmentalimpactsbutalsounlockmyriadThisreportbytheWorldEconomicForum,Kearneybenefits.Theseincludecostsavings,enhancedbrandandObserverResearchFoundation(ORF)presentsreputationandtheabilitytothriveinanincreasinglyavitalblueprintforIndianbusinesses,policy-environmentallyconsciousglobalmarketplace.makersandstakeholders.ItunderscoresthecriticalimportanceoftacklingScope3emissions,whichWewouldliketoextendourgratitudetotheconstituteasignificantproportionofacompany’sdedicatedresearchers,expertsandorganizationscarbonfootprintbutoftenremainunaddressedduewhohavecontributedtheirknowledgeandinsightstotheircomplex,interconnectednature.tothisreport.TheircollectiveexpertisehasbeeninstrumentalincreatingacomprehensiveguideSpecifically,givenIndia’srapidindustrializationthatistailoredtotheuniquechallengesandanditsburgeoningeconomy,theneedtoalignopportunitiesinIndia.DecarbonizingSupplyChains:AScope3PlaybookforIndia3ExecutivesummaryInaworldincreasinglygrapplingwiththeandthosethatmakebusinesssenseisessentialconsequencesofclimatechange,theimperativetodrivecommitmentandensurelong-termtoreducecarbonemissionshasneverbeencompliance.morepronounced.Thenexusofbusinessandenvironmentalresponsibility,particularlyin3.Developanupstream/downstreamcarbonthecontextofsupplychains,formsacriticalreductionstrategy:Businessesmustidentifybattlegroundinthefightagainstclimatechange.strategic,high-priorityareasforemissionsThisreportbytheWorldEconomicForum,Kearneyreductionwithinthesupplychain.ThisentailsandObserverResearchFoundationrepresentsacollaborationwithsupplychainpartnerstopioneeringandcomprehensiveefforttoguideIndianalignefforts,promotesustainablepracticesandbusinesses,policy-makersandstakeholdersintheminimizeemissionscollectively.ambitiousjourneytoreduceScope3emissions–acategoryofemissionsthathasofteneluded4.Defineorganizationalenablers:Toensureconcertedaction.successfulimplementation,businessesmustidentifyandputinplacethenecessaryTheplaybookisanchoredinthebeliefthat,inaenablers–governance,technology,rapidlydevelopingcountrylikeIndia,businessescommunication,talentmanagement,andhavethepowertobethearchitectsofbothpoliciesandprocesses.economicgrowthandenvironmentaltransformation.Indiancompaniesfacearangeofchallengesin5.Buildaroadmapandabusinesscase:HavingtheirScope3decarbonizationagenda,includingtakentheprecedingsteps,businessesmustthepreponderanceofsmallandmedium-sizedconstructaclearandactionableroadmapthatsupplierswholackawarenessofthetopic;theoutlinesthesteps,milestonesandtimelinesforlackofproperdatamanagementsystems;andtheachievingtheirScope3emissionsreductionrelativelynascentmaturityoftheScope3concepttargets.Alongwiththeroadmap,theymustcraftinthecountry.acompellingbusinesscasethathighlightsthefinancial,environmentalandreputationalbenefitsTheframeworklaidoutinthisreportisdesignedtoofpursuingScope3emissionsreduction.empowerIndiancompaniestounderstand,quantifyandreducetheirScope3emissionsinastructuredThejourneytodecarbonizesupplychainsisnotandstrategicmanner.Thisplaybookisbasedasolitaryone.Itrequiresthecollaborationofontheprinciplesofsustainability,environmentalbusinesses,governments,non-governmentalresponsibilityandethicalprocurementpractices,organizationsandthebroadercommunity.InandistailoredtoIndia’suniquecontext.particular,thegovernmentcanplayapivotalroleindrivingScope3emissionsreductionbylayingTheframeworkincludesthefollowingfivesteps:outaclearpolicyandregulatoryframework,drivingpublicawareness,offeringfinancialincentives/1.CreateaScope3baselineanddevelopasupporttoemissionsreductionprojects,drivingdatastrategy:Asolid,comprehensivebaselinepublicprocurementleadership,supportingresearchformsthefoundationfortheScope3journey.anddevelopment(R&D),enablingcollaborationBusinessesmustunderstandthesourcesandpartnerships,supportingcapacitybuildingandcategoriesofemissionsacrossthevalueandknowledgetransfer,ensuringlong-termpolicychain.Simultaneously,theymustdevelopacertaintyandensuringglobalcommitmentandrobustdatastrategythatoutlineshowdataonsupporttotheScope3agenda.Scope3emissionswillbecollected,measuredandreported.AccuratedataisthebedrockofTheScope3emissionsreductionjourneyholdsinformeddecision-making.thepromiseofnotonlyreducingcarbonemissionsbutalsousheringinafuturewherebusiness2.Setscience-basedandbusinesstargets:prosperityandenvironmentalstewardshipareBusinessesmustestablishclearandambitiousmutuallyreinforcing.Together,Indianbusinessesemissionsreductiontargetsandalignthemwithcandecarbonizesupplychainsandhelpbuildaglobalclimategoalsandtheirownsustainabilitysustainable,resilientandthrivingfutureforIndiaandgoals.Abalancebetweenscience-basedgoalstheworld.DecarbonizingSupplyChains:AScope3PlaybookforIndia4IntroductionMission2070:TheIndianet-zeroroadmapIndiaisinaphaseofrapidplanneddevelopment.impactsofthechangingclimate.SupportedbytheAsthecountrygrowsricher,itsenergyandrighteconomicframework,theseactionscanputmaterialconsumptiongrowaswell.OnitscurrentIndia–andtheworld–onapathtorealizingstrong,trajectory,thisgrowthcouldimplyasignificantequitableandsharedgrowth.expansionofIndia’sgreenhousegases(GHG)footprint–somethingthatneitherIndianortheInlinewiththisobjective,thegovernmentofworldcanafford.However,thisisnotagiven.IndiasetatargettoachievenetzeroemissionsUnlikemostdevelopednationswhosegrowthoverby2070attheUnitedNations’climatechangethepastmanydecadeshasbeenbuiltonhighconference,the26thConferenceofPartiesGHG-footprintinfrastructure,Indiahasaunique(COP26)inGlasgowin2021.Toalignthenation’sopportunitytoleapfrogthisjourneythroughlow/noeffortswiththedeclaredgoal,thegovernmentemissionstechnologies.1India’sLED(lightemittingupdateditsNationallyDeterminedContributiondiode)programmethatreplacedincandescent(NDC),whichithadinitiallysubmittedtotheUnitedbulbswithmoreenergy-efficientLEDbulbsforaNationsFrameworkConventiononClimateChangelargepopulationisagoodexampleofthecountry(UNFCCC),toreflectfourcarbonandenergyleapingaheadwithcleanertechnology.milestonesthatitaimstoachieveby2030ontheroadtonetzeroemissionsby2070.Together,theseIndiatodayhasanopportunitytotakeboldactionfivegoalsarereferredtoas“Panchamrit”,or“fivetoenableeconomicprosperityandaverttheworstnectarelements”.2FIGURE1Panchamrit:India’snetzeroby2070targetandfourkeymilestonesfor2030Netzeroemissionsby2070Meet50%ReachReduceReducetheenergy500gigawatt1,000,000,000carbonintensityrequirementsnon-fossiltonnesofoftheeconomywithrenewableenergycapacityprojectedcarbonby45%overenergydioxideemissions2005levelcumulativelySource:PressinformationBureau.DecarbonizingSupplyChains:AScope3PlaybookforIndia5Thegovernment’scommitmentsarealreadyInIndia’sprivatesector,whilemanycorporatereflectedinthetargetsofIndianpublicsectorleaderssuchasAdaniTransmission,HDFCundertakings(PSUs)andstate-controlledBank,JSWEnergy,MahindraGroup,Reliance,organizations.Forinstance,theIndianTCSandWiprohavealreadysetandpublishedRailways,whichcontributes4%ofIndia’stotalnetzerotargets,theScope3elementofthesetransportationemissions,3haspledgedtoachievetargetsisnotalwaysconsistentlyframed.6Whilenetzeroemissionsby2030.4Similarly,othertheIndiangovernmenthasnotyetmandatedPSUssuchasBharatPetroleum,CoalIndia,anysectororgroupofcompaniestosetspecificGasAuthorityofIndia,HindustanPetroleum,emissionsreductiontargets,moreandmoreIndianOil,OilandNaturalGasCorporationandIndiancompaniesareexpectedtoannouncenetRashtriyaIspatNigamhavedeclaredtheirownnetzerotargetsthankstogrowingpressurefrombothzerotargets.5investorsandglobalbuyers.FIGURE2NetzerotargettimelineforselectIndiancompanies2020202620302032203520382040204620472050Source:Publicfilings.Scope3emissionsreduction:TheIndiancontextScope3emissionsrefertoemissionscausedduringinformationcollectingandsharingexerciseswiththeindirectupstreamanddownstreamoperationsinsuppliersanddistributorswhosedirectemissionsacompany’svaluechain.7Theseareoftenthelargestcontributetoacompany’sScope3emissions.partofanorganization’scarbonfootprintandtendtobethehardesttoaccountforandmanage,asAsScope3emissionsincludethedirectemissionsoftheyfalloutsideoftheorganization’sdirectcontrol.allsupplychainpartners,theyconstituteasignificantAccountingforScope3emissionsrequiresdetailedshareoftotalemissionsacrossindustries.DecarbonizingSupplyChains:AScope3PlaybookforIndia6FIGURE3Percentagebreakupofindustry-levelemissions100%32%37%43%90%68%63%80%92%70%ManufacturingMaterials60%57%50%40%8%30%20%Powergeneration10%0%ServicesScope1and2Scope3Source:CDP.TheproportionatecontributionofScope3suggeststhatIndiancompaniesdonotyetemissionstototalemissionsmakesacompellingactivelyreportScope3emissions.OfallthecasefortheuseofScope3emissionsreductionIndiancompaniesreportingemissionsdatatotheasasignificantlevertoreachcompanies’netCarbonDisclosureProject(CDP),only31%reportzerotargets.However,carbondisclosuredataScope3emissions.FIGURE4PercentageofIndiancompaniesthatincludeScope3inemissionsreports69Scope3included72Totalcompanies31Scope3excludedSource:CDP.DecarbonizingSupplyChains:AScope3PlaybookforIndia7Withinthisset,only22%ofcompaniesthatreportemissionsleadstoalternativeinterpretationsofnet-zeroemissionsdatahavesetscope3targetscomplianttargeting.ThisissignificantparticularlybecausemostofwiththeScienceBasedTargetsinitiative(SBTi).ThistheIndianenergyPSUsthathavesetnet-zerotargetslackofmeasuring,reportingandtargetingofScope3haveonlyaccountedforScope1and2emissions.FIGURE5PercentageofIndiancompaniesthathaveScope3inSBTitargets78Scope3included2272TotalcompaniesScope3excludedSource:CDP.MostIndiancompaniesintheapparel,food33%ofthecompaniesreportingScope3,theandbeverages,agricultureandfossilfuel-highestacrosssectors.Thisisfollowedbythebasedenergysectorseitherdonotreportorservicesandmaterialssectorswhere31%andreportpartiallyontheirScope3emissions.8The27%ofcompaniesreportScope3emissions,infrastructureandpowergenerationsectorshaverespectively.FIGURE6PercentagebreakupofIndiancompaniesreportingScope3emissions,groupedbyindustry100%25%16%90%80%27%31%70%69%60%33%33%Services50%40%100%100%100%67%30%20%Fossil84%Power10%fuelsgeneration0%75%73%67%ApparelBiotechnology,Food,InfrastructureManufacturingMaterialshealthcareandbeveragesandpharmaceuticalsagricultureSource:CDP.NotreportingReportingDecarbonizingSupplyChains:AScope3PlaybookforIndia8Companiesarealreadyundergrowinginvestoremissions,whichmayfalloutsidetheirdirectcontrolpressuretodemonstratethattheyaretakingbutremainwithintheirsphereofresponsibility.Inresponsibilityfortheirfullclimateimpact,9andthiscontext,itisacriticalimperativeforcompaniesevencountriesarefacingincreasinginternationalacrossindustriestoframeaproactiveapproachtopressuretobetransparentaboutScope3Scope3emissionsreduction.The15categoriesofScope3:TheroleofprocurementinemissionsreductionTheGreenhouseGasProtocol(GHGProtocol)downstreamemissionsinacompany’svaluebreaksdownScope3emissionsinto15majorchain.Eachcategoryisclearlydefinedandprecisecategories.Categories1to8dealwithupstreamguidelinesareprovidedonhowtoassigncategoriesemissionswhilecategories9to15dealwiththetoactivitiesandmeasuretherelatedemissions.10FIGURE7CategoriesincludedunderScope3emissionsUpstreamCategory1Category5PurchasedgoodsandservicesWastegeneratedinoperationsCategory2Category6CapitalgoodsBusinesstravelCategory3Category7Fuel-andenergy-relatedactivitiesEmployeecommutingCategory4Category8UpstreamtransportationanddistributionUpstreamleasedassetsCategory9DownstreamCategory13DownstreamtransportationanddistributionPurchasedgoodsandservicesCategory14Category10FranchisesProcessingofsoldproductsCategory15InvestmentsCategory11UseofsoldproductsDecarbonizingSupplyChains:AScope3PlaybookforIndia9Category12End-of-lifetreatmentofsoldproductsSource:GHGProtocol.Theprocurementandsourcingfunctionsofawithupstreamemissionsofpurchasedfuelsandcompanyareprimarilyinvolvedincategories1-4:electricity,emissionsrelatingtotransmissionanddistributionlossesandemissionsinvolving1.Purchasedgoodsandservices:Thiscategorythegenerationofelectricitypurchasedbythecoversemissionsresultingfromtheextraction,reportingcompanyforresale.productionandtransportationofthegoodsandservicesthatthereportingcompanyacquires,4.Upstreamtransportationanddistribution:whicharenototherwiseincludedincategoriesThiscategorycoversemissionsresultingfrom2-8.thetransportationofgoodsandservicesbetweenthereportingcompany’sdirect(tier1)2.Capitalgoods:Thiscategorycoversemissionssuppliersanditsownpremisesinvehiclesandresultingfromtheextraction,productionandfacilitiesnotownedorcontrolledbythereportingtransportationofanycapitalgoodspurchasedcompany.bythereportingcompany.ThiscategorydoesnotallowforamortizationofemissionstiedtoaDataindicatesthatupstreamemissionsfromcapitalasset;allemissionsunderthiscategorymanufacturingtypicallyarisefromcategories1-4mustbedisclosedandaccountedforintheyearasextraction,transportationandrawmaterialoftheacquisition.conversioncontributesignificantlytoacompany’sScope3emissions.11Undermostcontemporary3.Fuelandenergy-relatedactivities:Thisorganizationstructures,theseactivitiesfallcategorycoversemissionsresultingfromundertheumbrellaofacompany’sprocurementextraction,productionandtransportationoffueldepartment.Thus,itisimportanttorecognizetheandenergypurchasedbythecompanythatisroleoftheprocurementfunctionofacompanyinnotalreadyaccountedforunderitsScope1andtheoverallgoalofemissionsreduction.Scope2reporting.ThiscategoryprimarilydealsDecarbonizingSupplyChains:AScope3PlaybookforIndia101Decarbonizingsupplychains:ChallengestoImagecredit:Scope3emissionsmanx_in_the_world,reductioninIndia@GettyImagesDecarbonizingSupplyChains:AScope3PlaybookforIndia11India’saccelerateddevelopmenttrajectoryitsequallycriticalemissionsreductiontargets.13impactsthecarbonemissionsinallsectorsofSimilarly,ananalysisofemissionsfromglobalitseconomy.Forexample,thegovernment’senergyuseintheindustrialsector,aswellasfocusedthrustoninfrastructuredevelopmentemissionsfromtheglobalagriculturesector,asatooltoreducespatialinequalitiesandhighlightsthecarefulbalancingactrequiredaspoverty12willrequirestrikingabalancebetweenIndiapursuesgrowthinthesevibrantandthrivingthenation’soverarchingdevelopmentgoalsandenginesofitseconomy.14FIGURE8Percentagebreakupofemissionsfromglobalenergyuseinindustry,andfromglobalagricultureandlandusePercentagebreakupofemissionsfromglobalenergyuseinindustry3012CementChemicalsandpetrochemicals15Ironandsteel43OthersPercentagebreakupofemissionsfromglobalagricultureandlanduse397RicecultivationOthersAgriculturalsoilsSource:OurWorldinData.2232LivestockandmanureReducingScope3emissionsinIndia,whileessentialcomplicatestheprocessofcalculatingandreducingformitigatingclimatechange,facesamyriadofScope3emissions.challenges.Thesechallengesarerootedinthecountry’sdiverseeconomy,infrastructureandsocialDataavailabilityandaccuracy:Accurateanddynamics.Someofthekeychallengesinclude:comprehensivedataonemissionssourcesandactivitieswithinsupplychainsisessentialforeffectiveComplexandfragmentedsupplychains:India’semissionsreduction.However,dataavailabilitysupplychainsareintricateandoftenfragmented,andaccuracycanbeasignificantchallengeinmakingitchallengingtotrackemissionsacrossIndia,asmanySMEsmaynothavethecapacitytheentirevaluechain.Thesesupplychainsspanorresourcestocollectandreportemissionsvariousindustries,fromagriculturetomanufacturingdata.15Thisdatagaphinderstheestablishmenttoservices,andfrequentlyinvolveamultitudeofofanemissionsbaselineandthedevelopmentofsmallandmedium-sizedenterprises(SMEs).Eachtargetedreductionstrategies.Sincescope-wiselinkinthesupplychainmayhavedifferentemissionsemissionsdatareportingisanewconceptformostsourcesanddatacollectioncapabilities,whichIndianfirms,theydonothavesystemsinplacetoDecarbonizingSupplyChains:AScope3PlaybookforIndia12accuratelyidentifyandcollectthedatathatwouldPolicyandregulatorygaps:ThelackofenableeffectivemeasurementandestimationofcomprehensiveandstringentregulationsspecificallytheirGHGemissions.ThepervasivelackofdataaddressingScope3emissionsreductioncancreatesahurdleforcompaniesthatarestartingtohinderprogress.WhileIndiahasmadesignificantreportemissions.WhileacompanymightbeablestridesinrenewableenergyadoptionandemissionstogetdataforScope1and2emissionsthroughanreporting,moretargetedpoliciesforScope3in-housedatacollectionexercise,collectingScope3emissionsandsupplychainsustainabilityaredatawillrequireacollaborativeeffortacrossitsentireneededtodrivechangeeffectively.17valuechain.Lackofincentives:WhilegovernmentpoliciesandTheScope3emissionsofafirmtranslatefromregulationscanprovideincentivesforemissionstheScope1and2emissionsofitspartners.reduction,theymaynotberobustoruniformThesepartners,intheIndiancontext,oftendoacrossindustries.Theabsenceofaclearandnotmeasureemissionsatall,andattimesprovideconsistentregulatoryframeworkforScope3datathatmayprovemisleading.Intheabsenceemissionsreductioncandiscouragebusinessesofaccuratebaselinedata,companiesoftenfindfromactivelyengaginginsustainabilityinitiatives.18themselvesresortingtoindustryaveragedatathatThepaucityoffinancialincentivesandrewardsmightbequiteinaccuratefortheirspecificcontextforbusinessesthatinvestinemissionsreductionandmightleadtomisplacedefforts.Toovercomeprojectsisafurtherdampener.thechallengeofdataavailabilityandquality,firmswouldneedtoengagetheirsupplychainpartnersTechnologicalandfinancialconstraints:inphaseddatasharingandcapacitybuildingManyIndianbusinesses,particularlySMEs,programmes.Suchtasksrequirebuildingtrustfacetechnologicalandfinancialconstraintsinwithinthesupplychainanddemonstratingmutualimplementingemissionsreductionstrategies.valueadditionfromtheemissionsdisclosureefforts.Transitioningtolow-carbontechnologiesandadoptingsustainablepracticesoftenrequiresNon-uniformreportingstandards:India’sleadingsubstantialinvestments.19Limitedaccesstocapital,corporatesarecurrentlysettingnetzerotargetsespeciallyforsmallerbusinesses,canbeadeterrent.onavoluntarybasis.Asaresult,thereisnosetstandardforreportingprogresstowardstheseEconomicprioritiesandaffordability:Inacountrytargets.TheexistenceofseveraldefinitionsandlikeIndiawheremillionsstilllackaccesstobasicemissionsaccountingproceduresmakesinter-firmservicesandeconomicgrowthisatoppriority,thecomparisonsafutileexercise.Oneprimaryexampleaffordabilityofemissionsreductionmeasurescanofmultipledefinitionsleadingtomisinterpretationbeaconcern.Balancingtheneedforeconomicofdatacanbeobservedincompanies’netzerodevelopmentandpovertyalleviationwiththedeclarations.WhilesomeprivatesectorcompaniesimperativetoreduceScope3emissionsisacomplexhavedefinednetzeroacrossallthreescopes,challengethatpolicy-makersmustaddress.20severalothercompanieshavelimitedtheirdefinitiontocompanyactivitiesacrossonlyScope1and2.Behaviouralandculturalfactors:CulturalandSuchadiscrepancyindefinitionnotonlyharmsbehaviouralfactorscaninfluenceemissionscomparisonamongcompaniesbutalsocreatesreductioninitiatives.Businessesandconsumersopportunitiestoengageinactivitiesthatartificiallymaylackawarenessandunderstandingabouttheleadtotheachievementofnetzeroemissions.significanceofScope3emissions.Acultureofwaste,highconsumptionandafocusonshort-Foranextremeexampleofthis,considerthetermeconomicgainscanbebarrierstoadoptinghypotheticalexampleofacompanythatdefinesnetsustainablepractices.zeroinScope1and2,andisstrugglingwithScope1emissionsfromtheirfleet.Inthiscontext,withoutChallengesinagricultureandlanduse:aScope3focus,theycouldtheoreticallyoutsourceAgricultureisasignificantsourceofScope3materialtransporttotheirsuppliersandaccelerateemissionsinIndia.ChallengesindecarbonizingtheirjourneytoScope1emissionsreduction.Thisthissectorincludeinefficientfarmingpractices,wouldturntheirScope1emissionsintoScope3,deforestationandland-usechanges,whichbutnotreallycontributetotheenvironmentinanycontributetoemissions.21EspeciallyinIndiawherematerialway.themajorityoftheagriculturesectorisnotfullyformalized,verylittleemissionsdataiscollectedorAnotherchallengeisthatsomecompaniesdomonitoredatthefarmlevel.Agri-basedcompaniesnotadheretotheSBTi’sdefinitionof“netzero”.inIndiaoftenlacktraceabilitytothefarmlevelWhileSBTirequirescompaniestoreduceabsolutesupplysource,limitingtheirabilitytomeasureandemissionsbyatleast90%insteadofusingcarbonreduceagriculture-specificemissions.Addressingremovalsoroffsets,manycompaniesinemissions-thesechallengesrequirescomprehensiveland-useintensiveindustriesfollowa“burnnow,paylater”policiesandsustainableagriculturalpractices.approachandhavesetnetzerotargetsthatrelylargelyonoffsets.ThesechallengescanbeTransportationemissions:India’stransportationaddressedbystandardizingthedefinitionofnetsector,includingroadandairtravel,contributeszeroemissionsforcompaniesacrossindustries,significantlytoScope3emissions.22InadequateusingadefinitionfromSBTiorasimilarplatform.16publictransportationinfrastructure,hightrafficDecarbonizingSupplyChains:AScope3PlaybookforIndia13congestionandtherapidgrowthoftheautomobileapproachandtimelines,itoftenprovesdifficultindustryexacerbatetransportemissions.FindingforthemtocorrectcoursetoabetteremissionssustainableandefficienttransportationsolutionsisreductionpaththatmaybesetbyoneoftheiracomplexchallengeinIndia’sdevelopingeconomy.industrypeers.ThischallengecanbeaddressedFurther,duetothelargepopulation,implementingthroughindustry-specificplaybooksdevelopednewemissionsnormsandlow-carbontechnologiesthroughacollaborativeeffortbetweenIndianintransportcantakeyears.companiesthatfacesimilarchallenges.Climatevulnerability:IndiaishighlyvulnerableToovercomethesechallengesacrosssectors,totheimpactsofclimatechange.WhileScopeIndianeedsamultifacetedapproachthatinvolves3emissionsreductionisessential,thecountryrobustdatacollectionandreportingmechanisms,mustalsoadapttochangingclimaticconditions.23targetedregulatorymeasures,financialincentives,Balancingmitigationandadaptationeffortsisatechnologydisseminationandwidespreadmultifacetedchallenge.awarenesscampaigns.EncouragingsustainabilitypracticesinsupplychainsandpromotingcircularAbsenceofindustry-specificbestpractices:economyprinciplescanalsoplayapivotalroleGiventhenascentstageofdecarbonizationeffortsinreducingScope3emissions.Additionally,inIndia,companiesundertakingnetzeroeffortsinternationalcollaborationandknowledge-sharingareoftenstartingfromscratchandformulatingonsuccessfulemissionsreductionstrategiescanfirm-specificapproachesandpractices.ThehelpIndianavigatethecomplexitiesofScope3lackofanestablished,India-specificguideemissionsreductionwhileaddressingbroaderforindustriesresultsinasignificantdegreeofclimatechangegoals.variabilityinthedecarbonizationeffortsofdifferentcompanieswithinthesamecategory.ThisispartlyThenexttwosectionsofthisreportpresentareflectedinthevastlydifferentnetzerotimelinesframeworkandpathwayforIndiancompaniessetbycompanieswithinthesameindustry.andthegovernmentofIndiatoovercometheseAmajordrawbackofthislackofsharedbestchallengesandacceleratethenation’sScope3practicesisthatoncecompaniescommittotheiremissionsjourney.DecarbonizingSupplyChains:AScope3PlaybookforIndia142Scope3emissionsreduction:AplaybookforIndiaImagecredit:ReducingScope3emissions,whichencompasswiththeaimoffosteringgreaterenvironmentalalexeys,indirectemissionsinacompany’svaluechain,responsibility,reducedcarbonfootprintsand@GettyImageshasbecomeanimperativeintheglobaldrivetoenhancedlong-termsustainability.combatclimatechangeandpromotesustainablebusinesspractices.TonavigatethiscomplexandByadoptingaholisticScope3framework,multifacetedchallenge,organizationswillneedcompaniescannotonlycontributetoamoretoadoptacomprehensiveframeworktailoredresilientandenvironmentallyconsciousfuturebutspecificallytoaddressScope3emissions.Thealsounlockcostsavings,improvetheirbrandapproachmustbestructuredtoidentify,measurereputationandincreasetheircompetitivenessinanandmitigatetheorganization’sindirectemissions,evolving,environmentallyconsciousmarket.DecarbonizingSupplyChains:AScope3PlaybookforIndia15AholisticframeworkforScope3emissionsreductionAdoptingaholisticapproachtoScope3emissionsorganizationalmaturityandambition,asillustratedreductioninvolvesfivecriticalsteps,eachtailoredtoinFigure9.FIGURE9Scope3emissionsreduction–Aholisticframework1CreateScope3baselineanddevelopdatastrategyBaseliningTrackingIncreasingmaturity2Setscience-basedandbusinesstargets3Developupstream/downstreamcarbonreductionstrategySupplierDesignforsustainabilityCustomerPortfolioevaluationengagementCircularityengagementOperations/SupplyEmployeeengagementchaindesign4DeﬁneorganizationalenablersGovernanceTechnologyCommunicationTalentPoliciesandenablementmanagementprocesses5BuildroadmapandbusinesscaseDecarbonizingSupplyChains:AScope3PlaybookforIndia162.1Step1:CreateaScope3baselineanddevelopadatastrategyImagecredit:Toembarkonaneffectivejourneytowards1.Identifyingemissionssources:ThefirsttaskisMmeEmil,emissionsreduction,organizationsmustfirsttoidentifyandcategorizesourcesofemissions@GettyImagesunderstandtheircurrentenvironmentalimpactthroughoutthevaluechain,encompassingbyestablishingabaseline.Subsequently,theybothupstream(suppliers)anddownstreamneedtodeveloparobustdatastrategythat(customers)aspects.ensurestheaccurate,ongoingmeasurementandreportingofScope3emissions.Thisprocess2.Collectingdata:Gatheringdatarelatedtolaysthefoundationforinformeddecision-making,theseemissionssourcesiscrucial.Itincludestransparencyandcontinuousimprovement.dataonenergyconsumption,transportation,rawmaterialsandotheractivitiescontributingtoBaseliningScope3emissions.ToreduceScope3emissions,organizationsmust3.Quantifyingemissions:Afterdatacollection,measureandunderstandtheminthefirstplaceandorganizationsmustusestandardizedemissionhaveaclearbaselineatthecategoryandsupplierfactorsandcalculationmethodologiestolevels.CreatingaScope3baselineinvolves:quantifytheirScope3emissions.Thisresultsinacomprehensivebaseline,oftenmeasuredincarbondioxide(CO2)-equivalentunits.DecarbonizingSupplyChains:AScope3PlaybookforIndia17FIGURE10Scope3calculationapproachThreedatamethodstoquantifyemissions:Proxiesandaveragedata,hybridandactivity-basedScope3calculationapproachThemethodforeachcategorycanbeselectedbasedon:RelativesizeoftheCompany’sDataavailabilityDataqualityCostandeffortcategory(withregardbusinessgoalsrequiredtoapplytoemissions)eachmethodCategory1Spend-basedAveragedataHybridSupplier-speciﬁcPurchasedgoodsSpend-basedAveragedataHybridSupplier-speciﬁcCategory2CapitalgoodsAveragedataSupplier-speciﬁcCategory3Spend-basedDistance-basedSupplier-speciﬁcBeneﬁtsofdataFuelandenergygranularityWaste-speciﬁcSupplier-speciﬁcCategory4IncreasedUpstreamtransportanddistributionSpend-based/Distance-basedDistance-basedtransparencyHighlightshotspotsCategory5AveragedataDistance-basedthatrequiretheWastegeneratedinoperationsmostemissionsAveragedataAsset/lessorreductionCategory6speciﬁcBusinesstravelBetterDistance-based/Fuel-baseddecision-makingCategory7EnablescompaniesEmployeecommutingAveragedataSite-speciﬁctomakebetterdecisionsonwhereCategory8Directandindirectuse-phaseemissionstodirecttheirUpstreamleasedassetinvestmentstoWaste-speciﬁcreduceemissionsCategory9DownstreamtransportanddistributionAveragedataAsset/lessorReinforcedAveragedataspeciﬁcreputationCategory10ReinforcescompanyProcessingofsoldproductsFranchise-ESGcommitmentspeciﬁcwithgranulardataCategory11collection/accountingUseofsoldproductsInvestment-AveragedataProject-speciﬁcspeciﬁcCategory12End-of-lifetreatmentCategory13DownstreamleasedassetsCategory14FranchisesCategory15InvestmentsAuditaccuracyRough-cutGranularDataavialabilityProxiesandaveragedataHybridActivity-basedDecarbonizingSupplyChains:AScope3PlaybookforIndia18Reportingcompaniestypicallycalculatetheir2.Dataqualityassurance:Ensuringtheprocurement-relatedscope3emissions(categoriesaccuracyandreliabilityofdata.Implementing1-4)usingaspend-basedapproach,anactivity-checksandbalancestoverifyandvalidatespecificapproach,oracombinationofboth,usingdatasourcesandmethodologiesiscrucialtoindustry-wideaveragedataforemissionfactors.preventinaccuracies.Inthespend-basedapproach,acompanyuses3.Regularreporting:Establishingaroutineitsannualspenddataandspend-basedemissionforreportingemissionsdata,typicallyinfactorspublishedbyverifieddatabasessuchasthelinewithannualsustainabilityreporting.UnitedStatesEnvironmentalProtectionAgency(USConsistentreportingenablestransparencyandEPA)andExiobasetoestimateitsoverallclimateaccountabilitytostakeholders.impact.Here,thespend-basedemissionfactorisavaluethatestimatestheemissionsperfinancialunitDevelopingmaturityofpurchasedgoodsorservices.Asorganizationsprogressthroughthisstep,theyInanactivity-specificapproach,afirmusesandevelopmaturityintheirdatastrategy,ensuringthatactivity-specificunitofmeasurementsuchasvolumetheprocessbecomesacontinuousandevolvingdata(kilogram,litre,etc.)forpurchasedgoodsorpractice.Thekeyelementsinthisphaseinclude:weightanddistancetransportedforlogistics.Byestimatingtheaverageemissionsimpactofeach1.Emissionshotspotidentification:Overtime,activityofproducingsuchserviceorgood,theorganizationsgaininsightsintotheiremissionscompanyarrivesatitsclimateimpact.Activity-hotspots.Thishelpspinpointareasintheirspecificemissionfactorscanbeestimatedusingsupplychainswherereductioneffortsshouldcustomlifecycleassessmentsorusingdatabasesbefocused.suchasEcoinvent,SpheraandAgribalyse.2.Scenarioplanning:MaturedatastrategiesTypically,anactivity-basedapproachprovidesallowforscenarioplanning.Organizationsamoreaccurateclimateimpactandisusedcanmodelthepotentialimpactsofvariousincombinationwithaspend-basedapproachemissionsreductioninitiativesandevaluatedependingontheavailabilityofdata.whichonesaremosteffectiveandcost-efficient.Tracking3.Externalreportingandcertification:OrganizationswithmaturedatastrategiesOncethebaselineisestablished,thenextstepistooftenmovetowardsexternalreportinganddevelopasystemfortrackingScope3emissionscertification,throughinitiativessuchasthecontinuously.Thisinvolves:CarbonDisclosureProject(CDP)orInternationalOrganizationforStandardization(ISO)14064-3.1.Datamanagement:DesigningarobustdataThisprovidesexternalvalidationoftheirefforts.managementsystemtocollect,storeandupdateemissionsdataregularly.UsingtherighttoolsandTheschematicbelowdescribesthefourstagesofsoftwareisessentialforefficientdatatracking.maturityintheScope3measurementjourney.DecarbonizingSupplyChains:AScope3PlaybookforIndia19FIGURE11Scope3measurement:Stagesofmeasurementmaturity1.Startingout3.SupplierintegrationBuildemissionsbaselineEngagesupplierstousingspenddata.furtherreﬁneandintegratespeciﬁcemissions.4.FullyembeddedinementmaturitydigitalagendaMeasurIntegratewithcompany-wide2.Foundationbuildingdigitalagenda;updateAdvancemeasurementmaturityperiodicallyandmonitor.usinglifecycleassessmentandactivity-basedemissionfactors.CreatingaScope3baselineanddevelopingItensuresthatorganizationshaveasolidadatastrategyismorethanjustatechnicalfoundationonwhichtoplanandimplementexercise.Itisacrucialenablerofinformedtheirefforts,effectivelyaligningenvironmentaldecision-making,sustainabilityperformanceresponsibilitywithsoundbusinesspractices.improvementandtrust-buildingwithstakeholders.2.2Step2:Setscience-basedandbusinesstargetsThissecondfoundationalstepinScope3emissionsemissionsreductioneffortsarenotmerelysymbolicreductioninvolvesestablishingclearandwell-butimpactfulandinlinewithglobalclimategoals.definedgoalsthatalignwithboththeimperativesOrganizationscanconsidersettingambitiousofenvironmentalsustainabilityandthepracticaltargetsforthemselvesandinfluencetheirkeyrealitiesofbusinessoperations.supplierstoalsosetscience-basedScope1,2and3targetsalignedwitha2050net-zeropathway.Science-basedtargets:Settingscience-basedtargetsrequirescompaniestocalibratetheirBusinesstargets:Intandemwithscience-basedemissionsreductionambitionsinaccordancewithtargets,itisessentialtosetbusinesstargetsthescientificbenchmarksneededtolimitglobalthatarerealistic,achievableandalignedwiththetemperaturerise.Thesetargetsareinformedbyorganization’soverarchingstrategicobjectives.thelatestclimatescienceandaredesignedtoThesetargetsconsiderthespecificoperationalcontributemeaningfullytointernationaleffortstoconstraintsandfinancialconsiderationsofthecombatclimatechange.Byaligningwithscience-company,ensuringthatemissionsreductioneffortsbasedtargets,organizationsensurethattheiraresustainableandeconomicallyviable.DecarbonizingSupplyChains:AScope3PlaybookforIndia20FIGURE12Settingscience-basedandbusinesstargetsScience-basedtargets30%Scope3reductionby2030Netzeroby2050Businesstargets10%year-on-yeardecreaseinpackagingpurchasesProductportfolioefﬁciencyincreaseby25%Department/Organization/Business80%electricﬂeetby2045Unit/Division/Category/ProductSelecttargetbasedonLevelofcorporatesustainabilityambitionStakeholderinterestFeasibilityofachievingtargetsSource:Kearney.Theconvergenceofscience-basedandbusinessstewardshipwhilesimultaneouslyacknowledgingtargetsinthisinitialstepprovidesacleardirectionthepracticalrealitiesofrunningabusiness.forcompaniestonavigatethecomplexitiesUltimately,thisstepnotonlysetsthedirectionbutofScope3emissionsreduction.Itlaysthealsodefinesthepurposeandcommitmentofthefoundationfortransparencyandaccountability,organizationinaddressingtheurgentchallengeofaswellasacommitmenttoenvironmentalScope3emissionsreduction.2.3Step3:Developupstream/downstreamcarbonreductionstrategyRecognizingtheintricatewebofsupplychainvaluechain,creatingacomprehensiveapproachemissions,thisthirdcrucialstepfocusesonincludingsupplierengagement,operationalmitigatingemissionsbothupstream(supplier-efficiency,sustainabledesign,circularity,focused)anddownstream(customer-focused).customerengagement,employeeinvolvementAholisticstrategyaddressesallaspectsoftheandportfolioevaluation.DecarbonizingSupplyChains:AScope3PlaybookforIndia21FIGURE13AddressingScope3requiresa“customer-back”approachapplyingmultiplereductionstrategiesReductionstrategiesScope3categoriesSupplier/CarrierengagementOperations1DesignforCircularityCustomerEmployeePortfolioengagementengagementevaluationdesignsustainabilityCategory1PurchasedgoodsCategory2CapitalgoodsCategory3FuelandenergyCategory4UpstreamtransportanddistributionCategory5WastegeneratedinoperationsCategory6BusinesstravelCategory7EmployeecommutingCategory8UpstreamleasedassetCategory9DownstreamtransportanddistributionCategory10ProcessingofsoldproductsCategory11UseofsoldproductsCategory12End-of-lifetreatmentCategory13DownstreamleasedassetsCategory14FranchisesCategory15Investments1Consistsofmakinginternaldecisionstooptimizemanufacturing,procurementorsupplychainoperationsforsustainabilityandcost.DecarbonizingSupplyChains:AScope3PlaybookforIndia22Supplierengagementidentifykeypartnersforcollaborativeemissionsreductionefforts.EffectivesupplierrelationshipSupplierassessment,prioritizationandrelationshipmanagementinvolvesopencommunication,managementarecentraltoScope3emissionscooperationandthemutualalignmentofreduction,assuppliersoftenconstituteasubstantialsustainabilitygoals.Theaimistoworktogethersourceofindirectemissions.Companiesmustwithsupplierstoreduceemissions,enhancesystematicallyassesstheirsuppliernetwork,evaluatingefficiencyandpromotesustainablepracticesemissionscontributionsandenvironmentalpractices.throughoutthevaluechain.ThismultifacetedapproachnotonlyreducesScope3emissionsPrioritizingsuppliersbasedontheiremissionsbutalsofosterslong-termsustainabilityintensityandenvironmentalperformancehelpspartnershipsthatbenefitboththeorganizationanditssuppliers.FIGURE14Supplierprioritizationtranslatingtosuppliersegment-basedinteractionmodelsEmissionsdistributionbynumberofsuppliersSupplieremissionsEmissionsCumulativeemissionsSupplierrelationshipmanagement(simpliﬁed)framework(TrueSRM®)HighThestrategicTakeactionClimateperformanceThepreferredWhoisreadytostart?LeavewellenoughaloneThemanagedCarbonreductionpotentialHighTimeforseriousﬁxesWhocouldthissupplierbe?LowLowDecarbonizingSupplyChains:AScope3PlaybookforIndia23Source:Kearney.SRM=Supplierrelationshipmanagement.FIGURE15Category-specificleversinsupplierengagementstrategyCategory1(Purchasedgoods)reductionleversProcurementMetrics3TrainingSupplier1andKPIsandresourcesengagementWhatkeyperformanceeffortscanbeindicators(KPIs),policies,Process4Incentivesacceleratedincentivesandactionscan2andpoliciesthroughindustrybeintegratedintothecollaborationsto:procurementfunction?SetstandardsandSupplierengagementleversProduct5Lifecycleassessmentsestablishbest6GreenproductdesignpracticesHowtoworkwithDrivingsuppliersonincreasingsector-speciﬁcproductdatagranularityscience-basedandproductdesigntargets,commonacrosstheentireclimatepracticessupplychain?AdvocateforOperational7JointPPAs1Manufacturingpolicychangesco-investmentsEnergy9innovationIncreasingaccesstorenewablesWhatjointoperational8efﬁciencyCarboncapturethroughinnovativeco-investmentscanbe10andabatementmechanismsimplementedtocatalysevaluechaincarbonDriveresearchreductions?anddevelopmentBuildingnewProcurement11Materialdemandreduction2industrycapabilitiesoptimization12Supplierswitchingandleadingearlyadoptionofnew/productdesigntechnologies/circularityWhatinternaldecisionscananorganizationmakerelatedtosuppliersanddemand?Customerengagement13CustomeroptionalityHowcananorganizationengagewithcustomerstoprovideoptionsofproductsorcomponentsbasedoncostorsustainabilitytrade-offs?Source:Kearney.1PPA=Powerpurchaseagreement.2Includesconsiderationsforinventoryoptimizationandproductandcomponentre-designthroughDesignforSustainability.DecarbonizingSupplyChains:AScope3PlaybookforIndia24Thestrategyfor“upstreamtransportandsupply-chaindesigndecisionsandcustomerdistribution”consistsofcarrierengagement,internalengagement(seeFigure16).FIGURE16UpstreamtransportanddistributionemissionsreductionleversProcurement1MetricsTrainingandKPIs3andresourcesWhatKPIs,policies,4Incentivesincentivesandactionscan2ProcessbeintegratedintotheandpoliciesAlternativelogisticsfunction?7equipment8EnergyefﬁciencyOperational5Technologyco-investments6AlternativeWhatjointoperationalfuelsinvestmentscanbeimplementedtocatalysevaluechaincarbonreductions?9Modalshift11AssetutilizationSupplychaindesignSupplynetwork12Packaging10optimizationoptimizationSupplychaindesign13RouteoptimizationWhatsupplychaineffortscananorganizationmakeinternally?Customer14CustomeroptionalityengagementHowcananorganizationengagecustomerstoprovidealternativerouteoptionsbasedoncost,serviceandemissions?1Includesproductre-specification/useofalternativematerialsandinventoryoptimization.DecarbonizingSupplyChains:AScope3PlaybookforIndia25Operationsandsupplychaingreenprinciplesareintegralindrivingemissionsdesignreductionintheseareas.Efficienttransportationalternatives,suchaselectrifiedorlow-emissionCompaniescansignificantlyreducetheirindirectvehicles,canfurtherminimizethecarbonfootprintemissionsbyoptimizinginternaloperationsoflogistics.andsupplychainprocesses.Thisinvolvesstreamliningtransportationroutes,reducingwasteInsupplychaindesign,twotypesofsustainabilityandmaximizingresourceefficiency.Leanandimprovementscanbeachieved,andcouldleadtobetterorworsecostefficiencies(seeFigure17).FIGURE17TwotypesofsustainabilityimprovementsTwotypesofsustainabilityimprovementsParallelExamplesObjectiveSustainabilityCostefﬁciencyNetworkoptimizationEfﬁciencyimprovesimprovesAssetutilizationimprovementsleadtohigherRoutingoptimizationsustainabilitySlowmovinginventory(SLOB)reductionOpposingExamplesObjectiveSustainabilityCostefﬁciencyAlternativeequipmentSustainabilityimprovesworsensHybridtrucksimprovementsGreenfuelrequireRecycledpalletsinvestmentDesignforsustainabilitybusinessescanoptimizeproductlifecycles,incorporaterecyclableorbiodegradablematerials,Designforsustainabilityemphasizestheimportanceandenhanceenergyefficiency.Sustainabledesignofcreatingproductsandpackagingwithminimalpracticesnotonlycontributetoreducedemissionsenvironmentalimpactthroughouttheirlifecycles.duringtheproduct’susebutalsominimizeresourceByrethinkingproductandpackagingdesign,consumption,wasteandemissionsassociatedwithmanufacturinganddisposal.DecarbonizingSupplyChains:AScope3PlaybookforIndia26FIGURE18The“30Seeds”frameworktounlocksustainabilityopportunitiesacrossthevaluechainQuestionstoaskCoreproductsHowcanabusinessre-designitscoreproductstobemoresustainable?“30Seeds”levers(potentialsuppliercollaborationactions)Design/materialinput/sourcing1Dematerialization4Component7Designfordurability10Reusablecontentreduction2Materialchoice5Designforuse/need8Increasedtesting11Designforreplacement3Detoxiﬁcation6Classicdesign9Maintenance12SustainablesourcingQuestionstoaskComplementarityHowcanproductdesignpromoteamoresustainablenetwork?“30Seeds”levers(potentialsuppliercollaborationactions)DistributionOutput/deliveryManufacturing19Localization13Designfor15Platforming17Secondarydisassemblypackaging14Optimized16Reducedshipping18DesignforefﬁciencymanufacturingQuestionstoaskCultureshiftsCanchangesindesignpromoteculturalshiftsandsustainableliving?“30Seeds”levers(potentialsuppliercollaborationactions)ProductuseEnd-of-lifedisposalReverselogistics20Closedloop23Incentives/awareness26Rethinking,reframing,29Systematizedreinventionproducts21Deepermeaning24Informatization27Digitaltransfer30Valueengineeringtransmaterialization22Eco-effectiveness25Environmentalrestoration28Social/community/improvementSource:Kearneyresearch.DecarbonizingSupplyChains:AScope3PlaybookforIndia27Understandingaproduct’semissionsenablesidentificationoftheleversforsustainabilityportfolio-wideextrapolationandenablesenhancement(seeFigure19).FIGURE19Product/portfolioevaluationandleveridentificationProductlevelevaluationPortfolioevaluationLeveridentiﬁcationSpeciﬁcfootprintanalysisExtrapolationApplyingtheknowledgeMaterialimpactPragmaticmethodology-IdentifycategorieswithhighShareofmaterialsintheproductglobalwarmingpotential(GWP)dividedupbyeveryReliesonstatisticalanalysistoﬁndarelationshipbetweenoneorshareandpotentialforchangecomponent/materialmultipletechnicalparameters-UnderstandkeyGWPdriversinConversionimpactOney=CurrentpriceProjectioninto“two-dimen-keycategoriesEvaluationofeachprocesssteptechnicalsional”diagramfromtheﬁrststepuntiltheﬁnalparameterx=Weight-Understanddifferencesinproduct/assemblyy=Currentpricecategoriesandproducts,e.g.Twotechnicaly=Currentpricelowpowervs.highpowerLogisticsimpactparameterslight-vehiclerangeGlobal/regionaltransportationtotheﬁnalpointofdeliveryz=Heightx=ycalc=ax1+bx2+c-Outlineﬁrstoptimizationx=WeightopportunitiesforkeycategoriesOtherimpacts(andsuppliers),e.g.Inclusionofallproduct-relatedIllustrationofimpact(e.g.SG&A)toverifyadiagramisnot-Differencesinenergyholisticmodelsourcesbyregion(Asiavs.possibleEurope,higherrenewablesshare,etc.)-Lowcarbondesignandmaterialchanges-Newmanufacturingprocesses,e.g.Elysisforaluminium-IncreaserecyclingshareThreetechnicalparametersFromproducttoportfolioByusingextrapolation,itispossibletoexpandtheresults(approximately)tothewholeportfolioSource:Kearney.Selling,generalandadministrativeexpenses.Circularityback”programmestorecoverandrefurbishproductsattheendoftheirusefullife.PartneringCircularstrategiesplayapivotalroleinScopewithrecyclingandremanufacturingfacilitiescan3emissionsreductionbyreimagininghowalsoenablebusinessestoclosetheloopontheirresourcesaremanagedthroughoutaproduct’sproductsandmaterials.lifecycle.CircularityrevolvesaroundtheconceptofminimizingwasteandmaximizingtheuseofFurthermore,supplychainoptimizationcanmaterialsandproductsthroughpracticessuchplayarolebyreducingwasteandinefficiencies,asrecycling,refurbishingandremanufacturing.furthermitigatingScope3emissions.CompaniesCircularapproacheshelpcompaniesextendshouldalsoexplorepotentialcollaborationswiththelifespanofproductsandmaterials,andhelpsuppliersandcustomerstofacilitatetheexchangereducetheneedforrawmaterials,energyandandreuseofmaterialsandproducts,creatingtransportationforproductionanddisposal.anetworkthatembracescircularpracticesthroughoutthevaluechain.Companiescanintegratecircularstrategiesintotheirvaluechainsthroughvariousmeans.EmbracingcircularitynotonlypromotesFirst,theycanfocusonproductdesignwithsustainabilitybutalsocontributestoScope3circularityinmind,usingmaterialsthatareeasyemissionsreductionbyminimizingwasteandtorecycleandsuitableformultiplelifecycles.maximizingresourceefficiency,ultimatelyfosteringAdditionally,companiescanimplement“take-amoreenvironmentallyconsciousandresponsiblebusinessecosystem.DecarbonizingSupplyChains:AScope3PlaybookforIndia28FIGURE20SevenareastodevelopstrategiestomaintainproductvalueandminimizewasteCirculareconomystrategies/treatmenthierarchyProductfocusEliminationRefuseFirstprioritymodelsReduceRethink1RedesignRenew1EliminationmodelsOutercyclesInnerReusecycles2RepairDiscardRefurbish5432Innercycles67Outer3Remanufacturecycles4MechanicallyrecycleUsephaseWastefocusChemicallyrecycle5DistributionDisposal/andsalesrecyclingBiologicallyrecyclecompostExtractionProcessingManufacturingDiscardEnergyrecovery1Lastpriority6Residualmanagement7DisposalSource:Kearney.1Allocationtocircularstrategiesisdebatable–withcurrenttechnologyitonlyservesasenergysource;inthelongterm,couldbepartofaclosedcarboncycle.Customerengagementcommitmenttodrivemeaningfulchange.Encouragingstafftocontributeinnovativeideas,EducatingcustomersabouttheenvironmentalrecognizingtheireffortsandfosteringacultureimpactoftheirchoicesisavitalaspectofScope3ofenvironmentalresponsibilitycanleadtomoreemissionsreduction.Byprovidinginformationandefficientoperations,reducedwasteandresponsibleraisingawareness,companiescanempowertheirdecision-makingwithintheorganization.customerstomakemoresustainabledecisions.Thisinvolvessharinginsightsintoproducts’Moreover,informedandmotivatedemployeescarbonfootprint,highlightingthebenefitsofcanserveasadvocatesforemissionsreductioneco-friendlyoptions,andofferingguidanceonbothwithinandoutsidethecompany,promotingresponsibleconsumptionpractices.Throughclearabroadercultureofsustainability.Byengagingandaccessiblecommunication,businessescanemployeesintheprocess,businessescanturnencouragecustomerstomakechoicesthatalignthemintochampionsofsustainability,leadingtowithsustainabilitygoals,ultimatelycontributingtoamorecomprehensiveandeffectiveapproachtoreducedindirectemissionsacrossthevaluechain.reducingindirectemissionsinthevaluechain.CustomereducationnotonlyenhancesPortfolioevaluationenvironmentalresponsibilitybutalsostrengthensbrandreputationandloyaltyamongenvironmentallyPortfolioevaluationisacriticalaspectofScopeconsciousconsumers.3emissionsreduction,involvingthecontinuousassessmentandoptimizationofanorganization’sEmployeeengagementproductandserviceofferings.Byregularlyreviewingtheemissionsfootprintoftheportfolio,businessesEmployeeengagementisavitalcomponentofcanidentifyhigh-impactareasanddetermineScope3emissionsreduction.WhenemployeeswhichproductsorservicescontributethemostareactivelyinvolvedinsustainabilityinitiativestoScope3emissions.Thisevaluationprocessandunderstandtheirroleinemissionsreduction,enablescompaniestoprioritizetheiremissionsorganizationscanharnesstheircreativityandreductioneffortseffectively,directingresourcestowardstheareasthatofferthegreatestpotentialDecarbonizingSupplyChains:AScope3PlaybookforIndia29forsustainabilitygains.ItalsoprovidesaframeworkDevelopinganupstream/downstreamcarbonformakinginformeddecisionsregardingproductreductionstrategyisamultifacetedendeavourdevelopment,divestmentorenhancements,thatrequiresaholisticapproachtoScope3aligningtheorganization’sofferingswithitsemissionsreduction.Byaddressingsuppliers,emissionsreductiongoals.internaloperations,productdesign,circularity,customerandemployeeengagement,andInessence,portfolioevaluationisastrategictoolportfolioevaluation,organizationscanimplementthatensuresthatScope3emissionsreductioncomprehensivesolutionsthatnotonlyreduceisnotjustastaticgoalbutanevolvingandemissionsbutalsocreateamoresustainableandadaptableprocessthatrespondstochangingenvironmentallyresponsiblevaluechain.Thisstepisbusinessdynamicsandemergingsustainabilityintegraltomeetingemissionsreductiontargetsandbestpractices.fosteringagreener,moresustainablefuture.BOX1FirstMoversCoalition(FMC)FMCcouldserveasacriticalenablerforIndianFormulateandaggregatedemandagainst2030companiesinemissions-intensiveindustries.commitments:Developafully-fledged2030TheFMCinitiativewaslaunchedatCOP26indemandcommitmentdrivenbymembersacross2021asapublic-privatepartnershiptocleansomecarbon-intensivesectors(aluminium,upsomeofthemostcarbon-intensivesectorsaviation,concrete,shipping,steelandtrucking).(suchasaluminium,aviation,concrete,shipping,steelandtrucking).Together,theseorganizationsSupportFMCmembers’deliveryagainsttheiraimtoleveragetheirresourcesandexpertisetocommitments:Offerarangeofsupportactivitiesaggregatedemand,establishabusinesscaseforincludingworkshopstoassesstechnologysupply-sideinvestments,andcreateearlymarketsavailabilityandpartnershipwithkeyfinanceforcleantechnologiesthroughpolicymeasuresplayers.andprivate-sectorengagements.SupportactivitiesoutsideFMCscope:OfferTheFMCsupportsitsmembersinmaximizingtheirsupportviapolicycreationandadvocacy.impactinthreeareas:2.4Step4:DefineorganizationalenablersToeffectivelyimplementemissionsreductiondedicated,cross-functionalsustainabilitycommitteesstrategies,organizationsmustestablishtheortaskforces,organizationscanoverseeemissionsnecessarystructures,processesandresourcesreductionefforts,setclearobjectives,monitortoempowertheirefforts.Definingorganizationalprogressandensureaccountability.enablersisintegraltoensuringthatScope3emissionsreductionisnotjustaloftygoalbutaTechnologyenablementpracticalandsustainableinitiativethatalignswithorganizationalobjectives.TechnologyenablementisanincreasinglycrucialorganizationalenablerinScope3emissionsGovernancereduction,asitempowerscompaniestocollect,manageandanalyseemissionsdataefficiently.EffectivegovernanceiscriticalinprovidingdirectionandguidancetotheScope3journey,Implementingdatamanagementsystemsandensuringthatemissionsreductionremainsatopcarbonaccountingsoftwarestreamlinesdataorganizationalpriority,drivingmeaningfulchangecollectionandcalculationprocesses,providingandfosteringamoreenvironmentallyresponsiblereal-timeinformationforinformeddecision-making.andsustainablecorporateculture.SeniorleadershipTheautomationandintegrationofemissionsdatabuy-inisparamount,asitencouragesacultureintoexistingbusinesssystemsreducestheriskofofsustainabilityandsecurestheallocationoferrorsandensuresdataavailability.Byembracingresources.Definingrolesandresponsibilitiestechnology,organizationscannotonlymonitorwithintheorganizationensuresthatindividualsemissionseffectivelybutalsoenhancetransparencyanddepartmentsareheldaccountableforspecificandreporting.Thismakesemissionsreductionemissionsreductiontargets.Byestablishingmoreachievable,efficientandsustainable.DecarbonizingSupplyChains:AScope3PlaybookforIndia30FIGURE21Scope3digitaltooloverviewToolScope3implementationlifecycle–DigitaltoolsB.BaselinecurrentstateDataLeverageinternaldatatotrackandmeasureESGmetricsonanongoingbasistobeA.Collectdatavisualizedacrossthecompany.Internal:ERPdata,SRM,BOM,etc.Market:MSCI,S&PGlobal,Bloomberg.ESGtoollandscapeisfragmentedbutrapidlygrowingReportStrategyE.ReportC.DevelopstrategyDevelopsustainabilityInterpretcurrentstateandreportandrespondtoleveragemarketdatatoinformexternalreportingbodiesandexecuteESGstrategy.ToolD.ImplementCollaborateinternallyandwithexternalstakeholderstoachieveESGtargetsSource:Kearneyresearch.EnterpriseresourceplanningSupplierrelationshipmanagementBillofmaterials.Communicationreportingonemissionsreductioninitiativesbuildtrustandaccountability,strengtheningthecommitmentEffectivecommunicationplaysapivotalroleastosustainability.Moreover,educationandtraininganorganizationalenablerinScope3emissionsprogrammesenhanceinternalawarenessandreduction.Bydevelopingacomprehensivepromoteacultureofsustainability,ensuringthatcommunicationstrategy,companiescanengageallstakeholdersareinformedandalignedwiththebothinternalandexternalstakeholders.Sharingorganization’sScope3emissionsreductiongoals.emissionsreductionobjectives,progressandClearandaccessiblecommunicationisnotjustaachievementswithemployees,customers,investorsmeansofconveyinginformation;itisthecatalystandthewidercommunityfostersasenseofforbuildingasustainablefuturebyengagingcollectiveresponsibility.Transparencyandregularandinspiringawiderangeofparticipantsintheemissionsreductionjourney.DecarbonizingSupplyChains:AScope3PlaybookforIndia31FIGURE22TargetedmessagingtoeducatedifferentstakeholdersCommunicationplanningAudiencesTypeofKeymessagesEngagementplancommunicationInternal-Globaltrendtowards-ConductworkshopwithESG-focusedbusinessmodelC-suitetointroduceC-suitewithemphasisonimprovingproposedScope3strategythetriplebottomlineandplanwithkeysuppliers-Increasingexternalpressure-EnableC-suitetopropagatefromstakeholders(e.g.Scope3visionpubliclyinvestors,customers,throughinternalandexternalsuppliers,etc.)toshareforums(newsletters,emissionsreductionprogressinterviews,shareholdermeetings,etc.)-StrategicopportunitiestodifferentiatefromcompetitorsandincreaseoperationalefﬁciencyInternal-Organizationalshiftsneeded-Conductroadshow1:1sinordertosupportachievingwithprocurementleadsandProcurementGHGvisionandgoalsproductleadstotrainthemleadershiponthetopicandinformthem-Timelineandactionplantooftheplanwithkeysuppliershelpproductleadsdesigninfrastructuretosupport-KeepprocurementandGHGinitiativeandproductleadsinformedprogrammesthroughexistingforumsandstatusreportsInternal-GHGgoalsandtherole-Arrangecommodity-wisesuppliersplayinachievingroadshowforprocurementthemandproductteamstotrainthemonthetopic,inform-Changesthatmustoccurthemofthechange,andintheday-to-daybusinessalignondetailedtoincorporateemissionsimplementationplanreductionEstablishregularforumtodiscussprogress,identifyProductroadblocksandalignonleadershipnextstepsExternal-Mutualbeneﬁttopursue-Sendmessage/letterfromGHGstrategytogetherC-suiteinformingofScope3vision,goalandimportance-CollaborationonGHGcanofincreasedsupplierbolsterrelationshipinthecollaborationlongrun-FollowupfromprocurementSuppliersteamstoreinforcemessageandengagefurtherSource:Kearney.DecarbonizingSupplyChains:AScope3PlaybookforIndia32Talentmanagementobjectives.Thesepoliciesguideandgovernthecompany’sapproachtoScope3emissionsandEffectivetalentmanagementensuresthattheenvironmentalstewardship.Supplychainguidelinesrightskillsandcompetenciesareinplacetodefineexpectationsforsuppliers,promotingtheireffectivelydrivesustainabilityinitiatives.Companiesalignmentwiththeorganization’ssustainabilitygoalsshouldinvestintrainingprogrammestoequipandinitiatives.employeeswiththeknowledgeandcapabilitiesrequiredtomanageemissionsreductioneffectively.ImplementingprocessesforcontinuousEstablishingadedicatedsustainabilityteamorimprovementensuresthatemissionsreductionappointingachiefsustainabilityofficer(CSO)canstrategiesandpoliciesremainrelevant,adaptiveprovidespecializedexpertiseinsustainabilityandresponsivetoevolvingbusinesslandscapespracticesandcarbonaccounting.andemergingsustainabilitybestpractices,ultimatelyensuringthelongevityandeffectivenessPoliciesandprocessesofemissionsreductioneffortsthroughoutthevaluechain.PoliciesandprocessesarefundamentalorganizationalenablersinScope3emissionsDefiningorganizationalenablersispivotalinreduction,providingtheframeworkwithinwhichensuringthatScope3emissionsreductionsustainabilityeffortscanbeeffectivelystructuredbecomesaningrainedpartoftheorganization’sandimplemented.cultureandoperations.Governancestructures,technologicalsupport,effectivecommunication,Establishingclearanddocumentedsustainabilitytalentmanagementandwell-definedpoliciesandpoliciesdemonstratesanorganization’sprocessesarethepillarsthatsustainemissionscommitmenttoemissionsreductionandsetsreductioninitiatives.Byestablishingtheseenablers,thestageforreachingitsbroadersustainabilityorganizationscannotonlymeettheirScope3emissionsreductiontargetsbutalsodriveabroadersustainabilityagendathatalignswithenvironmentalresponsibilityandeconomicsuccess.2.5Step5:BuildroadmapandbusinesscaseThisphaseinvolvesdevelopingaclear,actionableBusinesscasedevelopment:TosecuresupportplanandacompellingrationaleforScope3andcommitment,acompellingbusinesscaseisemissionsreductionefforts.essential.ThiscaseoutlinestherationaleforScope3emissionsreduction,emphasizingthefinancial,Roadmapdevelopment:AScope3emissionsenvironmentalandreputationalbenefits.Keyreductionroadmapoutlinesthespecificsteps,componentsofthebusinesscaseinclude:milestonesandtimelinesinanorganization’sScope3journey.Itprovidesastructuredandstrategic1.Costsavings:Demonstratingthepotentialcostapproachtoguidetheorganizationthroughthesavingsassociatedwithemissionsreductioncomplexlandscapeofindirectemissionsreduction.efforts.ThismayinvolvereducedenergyKeyelementsoftheroadmapinclude:consumption,transportationexpensesandwastemanagementcosts.1.Targetsetting:Clearlydefineemissionsreductiontargets,bothshort-andlong-term,inalignment2.Competitiveadvantage:Highlightingthewithscience-basedandbusinessobjectives.competitiveadvantagesofbeingasustainabilityleader.CompaniesthatactivelyreduceScope2.Actionplan:Identifythespecificinitiativesand3emissionsoftenattractenvironmentallyprojectsthatwillleadtoemissionsreduction.consciouscustomersandinvestors.Thisincludessupplychainoptimization,supplierengagement,processimprovementsand3.Riskmitigation:Emphasizinghowemissionstechnologyadoption.reductioncontributestoriskmitigation.Thisincludesreducingvulnerabilitytosupply3.Resourceallocation:Determinetheresources,chaindisruptions,regulatorychangesandincludingpersonnel,budgetandtechnology,reputationalrisks.requiredtoimplementtheroadmapeffectively.4.Environmentalstewardship:Conveyingthe4.Monitoringandreporting:Establishorganization’scommitmenttoenvironmentalmechanismsforcontinuousmonitoring,dataresponsibilityandsustainability.Thisfosterscollectionandreportingtotrackprogressandapositivepublicimageandsupportstheensureaccountability.organization’scorporatesocialresponsibilitygoals.DecarbonizingSupplyChains:AScope3PlaybookforIndia33FIGURE23Illustrativeexampleofhigh-levelanddetailedroadmapsExecutive-levelroadmapDetailedroadmaps(ﬁve-yeartargets)(25-yeartargets)Keyfocusareas:Category-speciﬁc,basedonﬁve-stepprojectmanagementapproach:1Keymilestones2Stakeholder(suppliers,customers,1Align2Planemployees)emissionsreduction3Engageactivities4Pilot3Datamaturity5Scale4Technologyenablement5Operatingmodel6ChangemanagementSource:Kearney.Bydevelopingaroadmapandbusinessoutlinesthepathforwardbutalsosecurescase,organizationsprovideastructuredthesupport,resourcesandenthusiasmplanandacompellingargumentforScopeneededtodrivemeaningful,effectivechange3emissionsreduction.Thisstepnotonlyinsupplychainemissionsreduction.DecarbonizingSupplyChains:AScope3PlaybookforIndia343EnablingtheScope3transformation:Imagecredit:TenimperativesforVigneshKamathgovernmentaction@GettyImagesDecarbonizingSupplyChains:AScope3PlaybookforIndia35TheimperativesforaddressingScope3emissionsroleindrivingScope3emissionsreduction.ThisinIndiaareunequivocal.Themagnitudeofthesechapterexplores10criticalimperativesfortheemissionsnecessitatesaholisticapproachthatIndiangovernmenttotakeproactivemeasuresextendsbeyondcorporateboundaries.InthisandincorporateScope3emissionsreductioninitscontext,thegovernmentofIndiaplaysapivotalpolicyframeworkandregulations.FIGURE24EnablingtheScope3transformation1Policyframeworkandregulation6Researchanddevelopmentsupport2Publicawarenessandeducation7Collaborationandpartnerships3Feminaisnscioianlsinrceednutcivteiosnapnrdojseucptsportfor8Cknaopwacleitdygbeutirldaninsgfearnd4Supportforsustainableinfrastructure9Long-termpolicycertainty5Publicprocurementleadership10GloballeadershipanddiplomacyImperative1PolicyframeworkandregulationTheIndiangovernmentcansignificantlyadvanceTheintroductionofcarbonpricingmechanisms,Scope3emissionsreductionthrougharobustemissionstradingandtaxincentivescanprovidepolicyframeworkandregulation.Bysettingtangibleeconomicincentivesforbusinessesclearandambitiousemissionsreductiontargets,toactivelyreducetheirScope3emissions.Byenforcingemissionsreportingandimplementingcreatingacomprehensiveregulatoryenvironmentstringentsustainabilitystandards,thegovernmentthatalignswithinternationalsustainabilitycanguidebusinessesandindustriestoadoptstandardsandIndia’sclimatecommitments,thesustainablepracticesthroughouttheirsupplygovernmentcandrivemeaningfulchange,promotechains.Regulatorymeasurescanencourageresponsiblebusinesspracticesandcontributetoaemissionstracking,disclosureandtransparency,moresustainableandlow-carbonfuture.fosteringacultureofenvironmentalresponsibility.DecarbonizingSupplyChains:AScope3PlaybookforIndia36Imperative2PublicawarenessandeducationPromotingpublicawarenessandeducationcaninspireaculturalshifttowardsenvironmentallyplayavitalroleinIndia’sScope3emissionsresponsiblepracticesinsupplychains,reductionjourney.Throughcomprehensivetransportationandconsumption.Additionally,campaignsandinitiatives,thegovernmentcaneducationalprogrammesinschools,universitiesinformandeducatebusinesses,communitiesandvocationalinstitutionscanequiptheandindividualsaboutthesignificanceofScope3futureworkforcewiththeknowledgeandskillsemissions,theirimpactontheenvironmentandnecessarytodriveemissionsreductionacrossthebenefitsofreducingthem.Thisawarenessindustries.Byfosteringpublicawarenessandcanextendtosustainableconsumptionandtheeducation,thegovernmentcanempoweritsimportanceofresponsiblechoicesindailylife.citizensandbusinessestoactivelyparticipateinthejourneytowardsagreener,moresustainableBymakingsustainabilityandemissionsreductionandlow-emissionsfuture.apartofpublicdiscourse,thegovernmentcanImperative3FinancialincentivesandsupportforemissionsreductionprojectsTargetedtaxbenefits,grantsorsubsidiesforinitiativesfocusedonrenewableenergyadoption,businessesthatinvestindecarbonizingtheirenergyefficiency,sustainabletransportationandsupplychainscanencourageabroadadoptionemissions-trackingtools.Establishingdedicatedofsustainablepracticesacrossindustries.Thefundsandfinancialmechanismsforemissionsgovernment’sfinancialsupportcanextendtoreductionprojectscanfurtherincentivizebusinesses.Imperative4SupportforsustainableinfrastructureByinvestinginandincentivizingeco-friendlyandgreenbuildingstandardscanreduceemissionstransportationsystems,suchaspublictransitintheconstruction,infrastructureandrealestateandelectricvehiclechargingnetworks,thesectors.Bycreatinganenvironmentconducivetogovernmentcanfacilitateemissionsreductionsustainableinfrastructureandemissionsreductioninthetransportationsector,whichcontributesinitiatives,thegovernmentcanacceleratethetoasignificantproportionofindirectemissions.transitiontoalow-carboneconomyanddriveAdditionally,promotingsustainableurbanplanningmeaningfulchangeinreducingScope3emissions.Imperative5PublicprocurementleadershipThegovernmentcansetapowerfulexampleproductsanddriveinnovationinsustainableforbusinessesandsuppliersbyprioritizingpractices.Thisleadershipnotonlycontributestosustainableandlow-carbonproductsandservicesdirectemissionsreductionswithingovernmentinitsprocurementprocesses.Byestablishingoperationsbutalsoripplesthroughthesupplyclearsustainabilitycriteriaforitspurchases,thechain,encouragingsupplierstoadopteco-governmentcanfavourproductswithlowerfriendlymeasures.Publicprocurementleadershipcarbonfootprintsandsettargetsforemissionscanfosteracultureofsustainability,inspiringreductionthroughoutsupplychains.ThroughitsbusinessestomakeScope3emissionsreductionprocurementpower,thegovernmentcanstimulateanintegralpartoftheiroperationsandsupplymarketdemandforenvironmentallyresponsiblechainmanagement.DecarbonizingSupplyChains:AScope3PlaybookforIndia37Imperative6ResearchanddevelopmentsupportByallocatingfundingandresourcestoR&DAdditionally,incentivizingR&Deffortsfocusedoninitiativesfocusedonsustainabletechnologies,supplychainoptimizationandemissionstrackingmaterialsandprocesses,thegovernmentcandrivetoolscanprovidebusinesseswiththenecessaryinnovationthatdirectlyimpactsemissionsacrosstoolsandknowledgetodriveScope3emissionsthesupplychain.Thissupportcanleadtothereductioneffectively.Byencouragingacultureofdevelopmentofcleaner,moreefficientandlow-innovationandsustainabilitythroughR&Dsupport,carbontechnologies,influencingentireindustriestothegovernmentcanempowerorganizationsadoptenvironmentallyresponsiblepractices.tomeettheiremissionsreductiontargetsandtransitiontoagreener,moreenvironmentallyThegovernmentcanalsopromotecollaborationresponsiblefuture.InvestinginR&DwouldnotbetweenbusinessesandresearchinstitutionstoonlypromoteemissionsreductionbutwouldalsoacceleratetheadoptionofR&D-drivensolutions,positionIndiaasaleaderinsustainabletechnologyenhancingthecompetitivenessofcompaniesandinnovation,potentiallycreatingopportunitiesforthatinvestinemissions-reducinginnovations.technologyexports.Imperative7CollaborationandpartnershipsByfosteringallianceswithindustryassociations,beestablishedtojointlyfundandimplementinternationalorganizations,researchinstitutionsemissionsreductionprojects,acceleratingtheandnon-governmentalorganizations,theadoptionofsustainablepracticesinsupplygovernmentcanleverageacollectiveeffortchains.Byactivelyengaginginglobalandregionaltoaddresscomplexsupplychainemissions.collaborativeefforts,thegovernmentcanenhanceCollaborativeinitiativescanfacilitateknowledgeIndia’ssustainabilityprofile,driveemissionssharing,bestpracticeexchangeanddevelopmentreductioninitiatives,andworktowardsamoreofindustry-specificemissionsreductionstrategies.environmentallyresponsibleandsustainablefuture,Furthermore,public-privatepartnershipscanaligningwiththecountry’sambitiousclimategoals.Imperative8CapacitybuildingandknowledgetransferEstablishingtrainingprogrammes,workshops,solutionsforemissionsreduction,facilitatingandeducationalresourcesforbusinessesandknowledgetransferandtechnologyadoption.organizationscanequipthemwiththenecessaryskillsandexpertisetoidentifyandreduceindirectBybuildingthecapacityandtransferringemissionswithintheirsupplychains.Sharingbestknowledgetobusinesses,thegovernmentcanpractices,guidelinesandcasestudiescanfosterempoweradiverserangeofindustriestoactivelyacultureofsustainability,encouragingcompaniesengageinScope3emissionsreductionefforts,toadoptenvironmentallyresponsiblepractices.fosteringamoresustainable,low-emissionandThegovernmentcanalsoinvestinresearchandenvironmentallyconsciouseconomiclandscapedevelopmentinitiativesthatgenerateinnovativeinIndia.Imperative9Long-termpolicycertaintyImplementingandmaintainingconsistent,certaintyoffersstabilityandincentivesforthepredictableandforward-lookingpoliciesandadoptionofsustainabletechnologies,practicesandregulationsthatencourageemissionsreductionemissionsreductionprojects.Itallowscompaniespracticescanhelpbusinessesandindustriestoplan,allocateresourcesandmakeinformed,confidentlyinvestinsustainabilityinitiativesthatstrategicdecisionstoreducetheirScope3spantheirsupplychains.Suchlong-termpolicyemissionsoverextendedperiods.DecarbonizingSupplyChains:AScope3PlaybookforIndia38Imperative10GloballeadershipanddiplomacyAsakeyleaderintheinternationalcommunity,agreementsandfosteringcollaborationwithotherIndiacantaketheinitiativetoadvocateforstrongernations.India’sinfluenceanddiplomaticeffortscanglobaleffortstoaddressScope3emissions.Thisinspireaglobalshifttowardsmoresustainableandentailsparticipatingactivelyininternationalclimatelow-carbonsupplychains.Imagecredit:AddressingScope3emissionsisnotjustaeconomicgrowthwithenvironmentalresponsibility,KishoreJ,responsibility;itisanecessityforthegovernmentfosteringafuturewheresustainabilityandprosperity@GettyImagesofIndia.Theimperativesdiscussedinthischaptergohandinhand.ThejourneytowardsScope3underscorethecriticalroleofgovernmentindrivingemissionsreductionbeginswithdecisiveactionemissionsreductioneffortswithinsupplychains.Byfromthegovernment,shapingamoreresilientandimplementingtheseimperatives,IndiacanalignitsenvironmentallyconsciousIndia.DecarbonizingSupplyChains:AScope3PlaybookforIndia39ConclusionInthepursuitofasustainableandprosperinaworldthatincreasinglyvaluesenvironmentallyresponsiblefuture,theimperativesustainability.todecarbonizesupplychainsisnon-negotiable.ThejourneytodecarbonizevaluechainsThisisnotjustareportbutacalltoaction.Itispromisesnotonlyenvironmentalresponsibilityacompendiumofknowledgeandbestpracticesbutalsoeconomicprosperity,operationalthatcanguideorganizationslargeandsmallinefficiencyandlong-termresilience.Asbusinessestheirquestforsustainability.navigatetheunchartedwatersofclimatechange,thedecarbonizationofsupplychainsemergesAsthereportindicates,thejourneytodecarbonizeasapivotalavenueforIndianbusinessestosupplychainsisnotasolitaryone.Itrequiresdemonstrateenvironmentalleadershipwhilethecollaborationofbusinesses,governments,securingtheirlong-termviability.non-governmentalorganizationsandthebroadercommunity.ItisajourneythatholdsthepromiseThechoicesmadetodaywillshapetheworldofnotonlyreducingcarbonemissionsbutalsooftomorrow.ThedecisionstakenbyIndianusheringinafuturewherebusinessprosperitybusinessesandorganizationswillhaveafar-andenvironmentalstewardshiparemutuallyreachingimpactontheenvironment,societyandreinforcing.Together,Indianbusinesses,policy-theeconomy.EmbracingScope3emissionsmakersandstakeholderscandecarbonizesupplyreductionisnotjustaresponsibility;itisanchainsandhelpbuildasustainable,resilientandopportunity–achancetolead,innovateandthrivingfutureforIndiaandtheworld.DecarbonizingSupplyChains:AScope3PlaybookforIndia40ContributorsWorldEconomicForumSriramGuttaHead,IndiaandDeputyHead,SouthAsiaPabloBurkolterLead,CorporateClimateAmbitionAnoopRamakrishnanLead,RegionalAgenda–IndiaandSouthAsiaGeetuGeorgePartnerLead,IndiaandSouthAsiaKearneyViswanathanRajendranPartner,Kearney,IndiaSwarajBudhavaramSeniorSourcingAnalyst,Kearney,IndiaMananShahPrincipal,Kearney,IndiaImranDassuPartner,Kearney,UKTanimaSinghManager,Kearney,IndiaPrateekGuptaLeadProductAnalyst,Kearney,IndiaArunUnniPartner,Kearney,IndiaVijayKasiPartner,Kearney,IndiaObserverResearchFoundationMihirSharmaSeniorFellowandHead,EconomyandGrowthSamirSaranProgramme,ObserverResearchFoundationPresident,ObserverResearchFoundation(ORF),India(ORF),IndiaDecarbonizingSupplyChains:AScope3PlaybookforIndia41Endnotes1.McDonald,MargauxandSpray,John,“IndiaCanBalanceCurbingEmissionsandEconomicGrowth”,InternationalMonetaryFund,2023.2.“India’sStandatCOP-26”,PressInformationBureau,NewDelhi,2022.3.“ElectrificationofIndianRailwaystoLowerCarbonFootprint”,NationalInvestmentPromotionandFacilitationAgency,InvestIndia,2023.4.“IndianRailwaystobecomeNetZeroCarbonEmitterby2030”,PressInformationBureau,NewDelhi,2023.5.“IOCL,ONGC,GAIL,BPCL,HPCLandEILtargetedto2038-2046”,NewsIP.com,2023.6.“CorporatesInIndiaHaveIncreasedTheirEnvironmentalDisclosuresBy40%In2022”,OutlookPlanetDesk,2023.7.Read,SimonandShine,Ian,“You’veprobablyheardofScope1,2and3emissions,butwhatareScope4emissions?”,WorldEconomicForum,2022.8.Borah,Prarthana,“Disclosure:ImperativeforASustainableIndia,CDPIndiaDisclosureReport”,CDP,2022.9.Eccles,RobertG.andKlimenko,Svetlana,“TheInvestorRevolution”,HarvardBusinessReview,2019.10.Barrow,MartinandBuckley,Benedict,“TechnicalGuidanceforCalculatingScope3EmissionsSupplementtotheCorporateValueChain(Scope3)Accounting&ReportingStandard”,Ghgprotocol.org,version1.0,2011.11.“UpstreamvsDownstream:BreakingDownScope3”,Persefoni,2022.12.“PovertyandUrbanisation”,UnitedNationsinIndia,2022.13.Aggarwal,VarunandPrasad,Bhavna,“NetZeroRoadmapforCorporatesinIndia”,WorldWildlifeFundIndia,2023.14.Ritchie,Hannah,Rosado,Pablo,andRoser,Max,“EmissionsbySector”.OurWorldinData,2020.15.Singhal,Nidhi,“India’selusivenetzerotarget:ReducingScope3emissionsbycompaniesmaybekey”,BusinessToday,2022.16.Pineda,AlbertoCarrillo,“CatalyzingValueChainDecarbonization”,ScienceBasedTargetsinitiative,2023.17.Sharma,Sonali,“India’sClimateChangePolicy:ChallengesandRecommendations”,IndianSchoolofPublicPolicy,2023.18.Thomas,Tanya,“India’spolicyandfundingvacuummakescorporatenetzerotargetsunviable”,CleanEnergyWire,2022.19.Goel,ShubhiandBiswas,DorothyAshmita,“FinancingLowCarbonTransitioninIndia’sMSMESector”,TheEnergyandResourcesInstitute,202220.Stahlke,Theresa,“Climatepolicyandtheconceptofco-benefitsinIndia”,JournalofSocialandEconomicDevelopment,2023.21.Padhee,ArabindaK.andWhitbread,Anthony,“Indianagriculture:Theroutepost-CoP26”,DowntoEarth,2022.22.“India’sLongTermLowCarbonDevelopmentStrategy”,MinistryofEnvironment,ForestandClimateChange,GovernmentofIndia,2022.23.Chakraborty,ArindamandKumar,Pankaj,“India’sClimateResearchAgenda:2030andbeyond”,DepartmentofScienceandTechnology,2023.DecarbonizingSupplyChains:AScope3PlaybookforIndia42TheWorldEconomicForum,committedtoimprovingthestateoftheworld,istheInternationalOrganizationforPublic-PrivateCooperation.TheForumengagestheforemostpolitical,businessandotherleadersofsocietytoshapeglobal,regionalandindustryagendas.WorldEconomicForum91–93routedelaCapiteCH-1223Cologny/GenevaSwitzerlandTel.:+41(0)228691212Fax:+41(0)227862744contact@weforum.orgwww.weforum.org

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