SME & Supply Chain Considerations
What is coming (or already here) for Supply Chains and SMEs
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Supply Chain Information
Mandatory reporting is coming, business expectations are already here.
Supply chains to Group 1 reporting entities will be required to provide emissions information and policy compliance at a minimum.
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Opportunities
Proactive companies seeking to enhance their climate reporting and ESG position will be rewarded.
Sustainable financing: loans could attract lower interest rates and investments in a business more attractive.
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Risks
Large entities already have the expectation their supply chain will align to the upcoming reporting requirements.
Companies not up to speed risk losing business. See case study on the following pages.
Impact on small business, supply chains and government-linked organisations
Scope 1
Emissions from sources owned or controlled by a company
Scope 2
Emissions from
purchased energy
Scope 3
Emissions from suppliers,
sold products or the companies in which
a financial institution invests
Reporting
Climate-related regulations and policies aimed at reducing carbon emissions or promoting sustainability might require adjustments in supply chain practices.
Small businesses who form part of the supply chain for a large reporting entity will likely have emissions data requested. This will be due to the business's emissions forming part of the reporting entity’s Scope 3 emissions data.
Understanding and calculating Scope 1, Scope 2, and Scope 3 emissions will form part of upcoming reporting requirements.
Understanding and quantifying supply chain emissions is crucial for an accurate assessment of a reporting entities total carbon footprint.
Scenario: You are a transport and logistics business for Woolworths
Scope 1 Emissions – Fuel from company owned trucks. These emissions would form part of Woolworths Scope 3 Emissions and will be requested by Woolworths
Scope 2 Emissions – Office electricity
Scope 3 Emissions – Third party logistics service, business travel, waste etc.