- Investor Watch -

Company reports lack supply chain and Scope 3 information

Published March 27, 2020

More than three-in-four of companies do not provide information about supply chain transparency in their reports.

A study of non-financial reporting found that that less than 1% of 1,000 companies surveyed publicly list their suppliers, even in high-risk sectors.

The failure to adequately address the supply chain is seen even in the reporting of greenhouse gas emissions, according to a study by the Alliance for Corporate Transparency.

While more than two-thirds of companies provide specific key performance indicators for direct emissions (Scope 1), this drops to little more than half when upstream emissions from purchased energy are taken into account (Scope 2). When applied to the company’s value chain (Scope 3), reporting drops even further, to just over one-third.

A notable exception is the apparel sector in which 36% of assessed companies provide at least a general description of the location of their supply chains. An additional almost 14% disclose the list of the actual suppliers.

Alfa Energy’s Sustainability Analyst, Nick Fedson, said: “Scope 3 emissions (which include the supply chain) usually represent the vast majority of corporate emissions. Supply chain emissions reductions happen through collaboration and knowledge-sharing with suppliers. Saying ‘Scope 3 emissions reductions’ can sound like a coercive approach to reducing supply chain emissions (and it certainly can be), but the Scope 3 guidance makes it clear that the spirit of achieving these reductions is really in collaboration between companies.”

Tags GHGs Greenhouse Gas Emission Nick Fedson Scope 1 Scope 2 Scope 3