Data Insight September 27, 2024

SBTi Scope 3 Targets Cluster around Supply – and Pharma Comes Out On Top   

Delving into data from The Science-Based Targets Initiative, our analysis found that companies are overwhelmingly setting supply-focused targets (rather than demand-focused targets). And industry-wise, pharma is leading the charge. We get into the details, as well as what one company, AstraZeneca, is doing to turn goals into reality.

Ananya Patil Avatar
Ananya Patil
Sustainability

The Data

  1. 1

    We mapped Scope 3 emissions targets across the supply chain Loop and found that 61% of companies in our data set have established Scope 3 targets that can be mapped to specific functional areas.

  2. 2

    Of these companies, 82% have specifically set upstream, supply-focused (rather than downstream, demand-focused) targets.

  3. 3

    Pharma companies are coming out ahead on the supply side, with every company setting at least four different SBTi targets.

  4. 4

    The automotive industry is driving ahead on the demand side, with every company committing to at least two downstream targets.

SBTi Scope 3 Targets Cluster around Supply – and Pharma Comes Out On Top  

Commitments in The Paris Agreement, a growing body of legislation, and consumer expectations all contribute, amongst other factors, to the need for businesses to achieve more immediate emissions reductions. And alongside this, new SBTi standards may be in the cards, too. In other words, the time is now for leaders to dive into their Scope 3 reduction plan and learn where their greatest opportunities exist.  

We analyzed the targets set by some of the world’s largest supply chains to determine how companies are collaborating with the SBTi and progressing on near-term targets. 108 of the 282 companies in our data set have recorded Scope 3 near-term targets (targets can be absolute, intensity-based, and/or engagement-based, according to SBTi) up until the end of 2022 (the latest progress release from the SBTi database).  

61% of the companies in the database are tackling Scope 3 emissions in terms of the 15 categories defined by the Greenhouse Gas protocol. The other 39% are stating high-level Scope 3 goals without delving into specificity. Focusing on the former to uncover areas for target-setting and progress, we mapped each of the Scope 3 categories to The Loop. 

Scope 3 categories mapped across all supply chain functions. 
Source: Zero100.

Of those setting specific Scope 3 targets, 82% of companies have set at least one category-specific target on the supply side. Categories 1 (purchased goods and services) and 4 (upstream transportation and distribution) hold the most targets, respectively. 

When we cut the data by industry, we found that pharma is leading the pack on target-setting across supply categories in terms of breadth and specificity (companies have at least four SBTi targets). It is followed by food and beverage, with these companies having at least 2.5 targets. And on the demand side, automotives are leading the way with at least two targets set per company.   

AstraZeneca’s Broad Approach to SBTi Targets and Progress   

In October 2021, SBTi verified AstraZeneca's targets under its new climate strategy. The company’s aim is to reduce absolute Scope 3 GHG emissions by 50% by FY2030 from a FY2019 base year. It is taking a comprehensive approach, which includes:  

  • Setting standards for suppliers – identifying its top 50% of suppliers (upstream transportation and distribution as well as business travel) by spend and requiring them to have science-based targets by FY2025. 
  • Investing in data capabilities – prioritizing the calculation and understanding of its biggest Scope 3 sources, principally within Category 1, where spend data is used to estimate the carbon emissions associated with each procurement category.  
  • Innovating for sustainability – developing next-generation respiratory inhalers with lower Global Warming Potential (GWP), amongst other examples of more sustainable products. 
  • Holding itself accountable – monitoring near- and long-term goals, setting intermediate target years of 2025, 2030, 2045, and 2050. (Thus, when looking at the SBTi database, there are multiple commitments from AstraZeneca.) 

The Takeaway 

Moving toward a more sustainable supply chain relies not only on goal-setting but actual progress. But both of these are dependent on getting your data in order so that you can accurately assess the current state. We know this is easier said than done, but AI-enabled tools, many of which we highlight in our AI Hub, can help. 

Step two involves evaluating the carbon footprint (ie, GHG emissions) of your supply chain and identifying the largest functions across supply and demand that contribute to Scope 1, 2, and 3 emissions. Breaking down Scope 3 into more precise targets should make your decarbonization effort more tangible and achievable. 

Following this, we recommend goals with a clear tie to Scope 3 category and reduction method. Regular accountability, as AstraZeneca illustrates, ensures milestones are met, too. These efforts will build customer trust and employee buy-in and drive us all toward the reality of decarbonization. 

To see a different data cut or to dig deeper into this topic, reach out to our Head of Research Analytics, Cody Stack, at Cody.Stack@zero100.com.   

Methodology 

Zero100’s proprietary data and analytics are a combined effort between our data scientists and research analysts. We provide data-first insights matched with our own research-backed points of view and bring this analysis to life via real-world case examples being led by supply chain practitioners today.    

For this study, we analyzed 282 supply chain organizations, relevant SBTi data, and 220+ unique references of companies setting targets relating to Scope 3 emission reduction. We also analyzed over 150 unique target wordings and contributing measures. 

Further Reading