The term decarbonization describes the process of reducing or eliminating greenhouse gas emissions, particularly carbon dioxide. In the light of global efforts to mitigate climate change, decarbonization has become a key pillar of corporate sustainability management.
Decarbonization in the supply chain
Companies face the complex challenge of not only reducing emissions in their own operations but also in their supply chains. This is crucial as supply chains, depending on the industry, can make up a significant share of companies' overall carbon footprint.
Scope 1 to Scope 3 emissions
Emissions along the supply chain are typically categorized into three scopes. Scope 1 refers to direct emissions from owned or operated sources, Scope 2 includes indirect emissions from purchased energy, and Scope 3 encompasses emissions along the value chain, including those from suppliers.
Legislation and initiatives increase pressure to decarbonize
Customers, investors and governments increasingly require companies to decarbonize their operations and processes. Legislation pertaining to the EU's "Fit for 55" package and climate-related provisions in other countries are putting businesses under pressure to analyze, reduce and disclose their emissions in greater detail.
Sound decarbonization strategies are therefore not only an ethical imperative but also a crucial factor for companies' competitiveness.
