For many companies with net zero goals, the greatest challenge is often not within their own operations but throughout their supply chain. Scope 3 emissions, the indirect greenhouse gases (GHGs) generated from purchased goods, transportation, waste, and product use, often account for 70-90% of a company’s total carbon footprint. Addressing them demands more than measurement – it requires collaboration, transparency, and the ability to influence change across the supply chain.
As regulations such as the European Union’s (EU) Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and California’s Climate Accountability Package (SB 253 and SB 261) expand accountability requirements, the focus on supply chain emissions is becoming increasingly important. The ability to effectively engage and influence suppliers has become a defining measure of corporate sustainability leadership.
Why Supplier Engagement Matters
Supplier engagement transforms the supply chain from a cost driver into a climate innovation ecosystem. Therefore, reducing Scope 3 emissions becomes more than a compliance exercise, but rather a strategic imperative. Companies that embed supplier collaboration into their sustainability programs gain measurable advantages such as:
- Risk mitigation: Suppliers that use carbon-intensive inputs can expose brands to price volatility, regulatory penalties, and reputational risks.
- Transparency and investor confidence: Investors now assess climate performance based on verified supply chain data and credible reporting.
- Innovation and efficiency: Collaborative supplier partnerships can spark innovation in low-carbon materials, process optimization, and logistics.
- Resilience and relationship strength: Suppliers aligned with corporate sustainability goals are more agile and more likely to invest in long-term shared success.
Five Steps to Engage and Influence Suppliers for Scope 3 Reduction
Building on this understanding, companies must translate ambition into action through a structured, measurable approach. Turning supplier engagement into tangible emissions reductions requires a clear roadmap that balances data-driven prioritization, collaboration, and accountability. The following five steps provide a practical framework for companies seeking to engage and influence suppliers in reducing Scope 3 emissions effectively.
- Map and prioritize high-impact suppliers: Begin by identifying where your greatest emissions occur. Many companies begin with spend-based carbon mapping, estimating emissions according to the value of purchased goods and services. More advanced programs combine this data with lifecycle assessments (LCAs) and supplier-specific data to pinpoint true emissions hotspots. By ranking suppliers by emission intensity and strategic importance, companies can target resources where they have the greatest effect. Typically, 20% of suppliers account for about 80% of Scope 3 emissions. Focusing engagement efforts here accelerates progress.
- Set clear expectations and align targets: Once high-impact suppliers are identified, communicate clear, measurable expectations that reflect your company’s climate commitments, such as Science Based Targets initiative (SBTi) alignment or a 1.5°C pathway. Formalizing these expectations in supplier codes of conduct, RFP requirements, and contract clauses ensure accountability. This approach establishes sustainability as a core business requirement.
- Collaborate and co-innovate: Effective supplier engagement requires collaboration, not compliance. Many suppliers, particularly small and medium enterprises, lack the technical capacity or capital to decarbonize independently. Due to this fact, it is critical for them to collaborate with their suppliers to not only reduce emissions but also strengthen mutual trust, spur innovation, and create shared intellectual value.
- Provide incentives and build capacity: Decarbonization accelerates when suppliers have both motivation and support, which companies can drive through incentive programs and capacity-building initiatives that make sustainability financially and operationally feasible. Companies should consider offering:
- Preferred supplier status or longer-term contracts for those achieving emissions reduction milestones.
- Co-financing or low-interest loans for energy efficiency or renewable energy projects.
- Training and toolkits that help suppliers adopt carbon accounting systems or improve process efficiency.
- Monitor, disclose, and reward progress: Since consistent measurement and transparent disclosure are essential for credibility, companies need to use standardized platforms to collect emissions data, evaluate performance, and benchmark progress. Companies should also reward suppliers’ progress by highlighting success stories in sustainability reports and recognizing top performers through awards or public acknowledgment. Transparency and recognition motivate improvement and foster a culture of shared accountability. Suppliers that see data used constructively tend to provide higher-quality information and sustain stronger emissions reduction momentum over time.
Case Study: AstraZeneca, Partnering for Scope 3 Decarbonization
AstraZeneca, a global biopharmaceutical company, specializes in the discovery, development, and commercialization of prescription medicines. Its Ambition Zero Carbon strategy targets 95% of suppliers by spend and 50% of upstream transport and business travel to set science-based targets (SBTs) by 2025, alongside a goal to reduce absolute Scope 3 emissions 50% by 2030 (from 2019). The company recognized that most of its footprint lies in the supply chain and treats supplier engagement as a strategic driver of decarbonization.
AstraZeneca segments suppliers by spend and emission intensity, focusing on high-impact categories such as APIs, packaging, and logistics. Around 85% of top suppliers are already engaged through direct collaboration and data sharing. Strong governance underpins progress: sustainability metrics are embedded in procurement, overseen by the Global Sustainability Council, and supported by a cross-functional Sustainability Champions Network.
To build supplier capability, AstraZeneca uses engagement targets, training, and partnerships with the Science Based Targets initiative and Pharmaceutical Supply Chain Initiative (PSCI) to improve data quality and readiness for target setting. In addition, AstraZeneca demonstrates how supplier partnerships can turn Scope 3 reduction from a compliance challenge into a catalyst for innovation and resilience across the pharmaceutical supply chain.
Conclusion
Engaging suppliers is the most powerful lever for reducing Scope 3 emissions and achieving credible net zero progress. As global regulations tighten and investor expectations rise, companies that transform supplier relationships from transactional to collaborative will lead in both compliance and competitiveness. By mapping high-impact suppliers, aligning targets, co-innovating solutions, providing incentives, and transparently tracking results, organizations can turn their supply chains into engines of decarbonization and innovation.
