The power of Scope 3 value chain analytics in the net-zero transition
This is a guest post by our partner, Point B, on the solution they built on Anaplan to help enterprises analyze and plan sustainability programs.
The net-zero transition could create a global marketplace exceeding $9T annually by 2030, catalyzed by scientific findings that underscore the need to limit global warming to 1.5°C by 2050. Other considerations include corporate climate action, shifting consumer sentiment, and proposed regulation, such as the recent U.S. Securities and Exchange Commission’s (SEC) proposed rule on climate-related disclosures.
In particular, the proposed SEC rule lights a fire under publicly traded companies to integrate climate scenario planning and Scope 3 greenhouse gas (GHG) emissions into their enterprise strategies. To capture this once-in-a-generation market opportunity and meet the objectives of the Paris Agreement, organizations need to invest in solutions that go beyond operations and direct control to address the entire global value chain.
A corporate value chain – characterized by Scope 3 GHG emissions – can represent as much as 90% of a GHG footprint (and can be greater than 95% in consumer and retail companies). Scope 3 emissions include upstream purchased goods and services (for example, the supply chain), the downstream use and disposition of sold products, and a dozen other categories. Each category affords potential carbon savings and value creation opportunity.
Analysis of Scope 1 and 2 GHG emissions – those within a company’s direct control – is relatively straightforward for most organizations. However, Scope 3 data and analytics solutions remain nascent. Scope 3 hot spots also can represent meaningful opportunities to address environmental, social, and public health challenges within low resource communities globally in parallel. Advantage lies in the ability to quantify the marginal carbon abatement cost, yield, and viability of a myriad of potential Scope 3 decarbonization pathways more rapidly and confidently.
Companies can take advantage of Scope 3 analytics to:
- Explore product and service innovation
- Develop and test new low-carbon business models
- Engage suppliers and stakeholders throughout the cycle of usage
- Remove waste (like cost) and mitigate supply chain risk
- Increase confidence in system change initiatives
Many organizations will invest billions of dollars on their net zero transformation in the coming decades and the Scope 3 value chain can represent the single greatest source of new value creation. However, most organizations lack appropriate data, technology, systems, tools, and competencies to see this through seamlessly. Organizations will need cloud-based, mobile-ready technology solutions that “ground truth” upstream, and that downstream Scope 3 data to implement decisions that affect suppliers, logistics, categories, and materials.
The ease with which Anaplan integrates disparate data to inform everyday decisions makes it an ideal platform to support Scope 3 value chain analytics. Point B’s Scope 3 Value Chain Analytics solution conducts deep analysis and scenario modeling of your entire global value chain to determine new pathways that accelerate action toward net zero goals. The solution can help you embrace your Scope 3 footprint as a strategic area of opportunity through integrated planning that analyzes GHG reduction impacts within the context of supply chain, consumer, financial, and operational considerations.
The bottom line is that Point B’s Scope 3 Value Chain Analytics solution can help you embrace the generational value creation opportunity created by the net zero transformation.
Click here for more information about Point B’s ESG Solution.