## About the support hub Fostering lasting value chain decarbonization by providing a first starting point to kick-off the Scope 3 decarbonization journey. ## In this section 1.1 Why Do Scope 3 Emissions matter?1.2 The Net-Zero Value Chain – Support Hub1.3 The Scope 3 Upstream Action Plan1.4 The Alliance of CEO Climate Leaders ## 1.1 Why Do Scope 3 emissions matter? Scope 3 emissions are the greenhouse gas (GHG) emissions that occur across a company’s value chain – both before (i.e., upstream) and after (i.e., downstream) its operations. For more information, please refer to the chapter “Get Started." ## Scope 3 up to 90% of total emissions According to the 2021 Alliance of CEO Climate Leaders' annual report, upstream emissions alone can account for up to ~75% of a company’s total emissions, including many of its most significant impacts such as emissions from the materials a company purchases, and the emissions from the products the company sells.As emissions sit across the value-chain, addressing them requires involving a wide range of stakeholders and kick-starting their net-zero journey – starting with your own direct suppliers and customers, and tickling down to Tier 2, 3, 4 suppliers, and customers. For more guidance on the cascading of Tier 2+ suppliers, please refer to the We Mean Business Coalition's Supplier Cascade initiative.Due to this amplifying effect and the sheer size, addressing Scope 3 emissions can drive significant climate impact and make a serious contribution to the fight against climate change. ## The challenges to measure and tackle Scope 3 emissions Tackling Scope 3 emissions is challenging. A 2023 survey of 230 organizations, carried out by SBTi and BCG, found that 50% of respondents self-reported to be “off track” for delivering their scope 3 target despite 40% of all respondents indicating that executives are directly accountable for decarbonization. ### Challenge 1: Data quality Obtaining Scope 3 emissions transparency requires your suppliers and customers to share detailed emissions data. However, many companies haven’t started to measure emissions yet and can therefore not share any primary emissions data. This means that companies must rely on high-level, outside-in estimates. At the same time, validating data accuracy of those suppliers or customers that have shared first emissions estimates is complex and time-consuming. ### Challenge 2: Scope of the task Companies can work with tens of thousands of suppliers, making it difficult to find the right starting point and level of engagement whilst managing the complexity and scope of the task. ### Challenge 3: Lack of resources and capacity Calculating accurate Scope 3 emissions is a time-intensive exercise and will require personnel, expertise, and the right systems and tools. ## The challenges from measuring and tackling Scope 3 emissions highlighted by a BCG recent analysis. The analysis which examined how Scope 3 emissions of the biggest 1,000 companies worldwide evolved between 2018-2021, leveraging CDP data, found that:500 companies had to be excluded from the analysis because they did not report Scope 3 emissions in 2018 and 2021 (or both), indicating challenges to start measuring Scope 3 emissions in the first place. 100 companies had an emissions evolution of 200+% or more, indicating significant re-baselining or methodological changes in how Scope 3 emissions are being calculated. This highlights that companies are still struggling with data quality and methodological calculation complexity. The remaining 400 companies indicated an annual average Scope 3 emissions decrease of -1.5%, significantly below the absolute annual reduction target of -2.5%, as defined by SBTi; and below an average annual decrease of -3.5% of Scope 1-2 emissions. ## As pressure - from consumers, investors, regulators, and other stakeholder groups – to tackle Scope 3 is increasing, starting to do so can give you an advantage and a head-start vis-à-vis competitors and regulatory requirements. Collectively, establishing greater transparency on supply chain emissions could also enable more effective policy support, which in turn will benefit your company, societies, and the environment. For more information on why Scope 3 GHG emissions matter and how to tackle them, please refer to GHG Protocol’s Scope 3 website, including links to the Scope 3 calculation guidance and a Scope 3 online course. ## 1.2 The Net-Zero Value Chain – Support Hub The Net-Zero Value Chain – Support Hub has been built by the World Economic Forum in partnership with the Boston Consulting Group (BCG) as knowledge partner, building upon experience, expertise and best practices of members of the Alliance of CEO Climate Leaders as well as on BCG project experience.The Alliance is grateful to eco-system partners for their support, including:We Mean Business Coalition (WMB)World Business Council For Sustainable Development (WBCSD) and The Climate DriveThe Science Based Targets initiative (SBTi) ## 1.3 The Scope 3 Upstream Action Plan Given the importance of Scope 3 upstream emissions, companies must start to tackle them in a systematic and meaningful way. Therefore, the Alliance of CEO Climate Leaders has defined a Scope 3 Upstream Action Plan, that puts Supply Chain decarbonization at its core and fosters immediate climate action. By endorsing the action plan, Alliance members should use the following guidance to bolster their action on Scope 3 upstream emissions, working towards the below milestones. ## Timeline *Chronological events and milestones* ## The Net-Zero Value Chain – Support Hub focuses on procurement teams and suppliers, to equip them with relevant information, tools, and references to key sources, to successfully implement the Net-Zero Value Chain – Action Plan. Given its key elements, the Scope 3 Upstream Action Plan has a direct impact on two key stakeholder groups, relevant to every endorsing member:The Procurement Teams within the endorsing company, responsible to lead and execute the supplier engagement usually in collaboration with the sustainability department. The Suppliers of the endorsing company, which will be asked to set Scope 1-3 targets and decarbonize according to those targets by 2030. ## 1.4 About the Alliance of CEO Climate Leaders The Alliance of CEO Climate Leaders is a CEO-led community with +130 Members and an initiative of the World Economic Forum. Each member of the Alliance is committed to raising bold climate ambition and accelerating the net zero transition by setting science-based targets, disclosing emissions and catalysing decarbonisation and partnerships across global value chains. For more information, please refer to the Alliance public website. ### Get involved in the Alliance of CEO Climate Leaders Join us on the journey to Net Zero. [Contact us](https://initiatives.weforum.org/alliance-of-ceo-climate-leaders/get-involved)