Collecting and managing carbon footprint information from suppliers during direct material sourcing process
The visible impacts of climate change are underscoring the need to assess the complete emissions generated by the products and services we use. To effectively manage the emission footprint, we must first measure it – this is where the importance of collecting and measuring emissions comes in. Businesses have already begun evaluating emissions they directly control (scope 1 and scope 2 emissions). However, quantifying scope 3 emissions presents a challenge. Scope 3 emissions arise from the production of purchased materials and services. Generally this constitutes to around 60-70% of the total product footprint, with the exact percentage varying across different industries.
Collecting and measuring scope 3 emissions entails collecting intricate data from a web of suppliers. Nonetheless, this difficulty also presents an opportunity. By scrutinising the emissions linked to every procured material or service before settling on suppliers, companies can significantly influence their scope 3 emissions.
This new feature in SAP Product sourcing plays a pivotal role in leveraging the aforementioned opportunity.
Step 2: Suppliers invited to the sourcing project would share the carbon footprint information in the specific section of the material/item in their quotation.
Step 3: Sourcing manager/Buyer would compare the supplier submitted quotations to choose the best supplier who has offered the best price and best quality item/material with the least environmental impact
Key Benefits of the feature:
- Early insights into carbon footprint associated with the procured material/service
- Carbon conscious award decisions
- Better control over scope 3 emissions of the products/services
Take a look at this short video to better understand this feature.
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