Sourcing Is Retail’s Emissions Hotspot. How Are Leaders Cutting Back?

The Data

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   The retail industry is one of the top ten most carbon-intensive industries and responsible for around 25% of global greenhouse gases. Around 98% of those emissions are classed as indirect (Scope 3).

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   Zero100 data and analysis found that, for retail companies, the Source function is responsible for 68% of Scope 3 emissions.

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   Leading retailers such as Williams-Sonoma and Decathlon are partnering with third parties like Anthesis and EcoVadis to measure and reduce emissions.

Tariffs and trade developments may trump sustainability as a supply chain priority right now, but regulatory momentum continues. Major policies in the EU, California, and New York are poised to take effect within the next few years and in this evolving landscape, understanding and addressing sourcing’s carbon impact isn’t just a sustainability goal, it’s a business imperative. 

Zooming in on the retail industry – one of the most carbon-intensive industries globally –  research found that around 98% of its emissions are indirect (ie, Scope 3). And while Scope 3 reporting is currently voluntary, this may change with upcoming regulations.  

There are lessons to be learned by retailers who are ahead of the curve. Here we explore where emissions cluster, how to measure them, and ways to move toward reduction.  

 
Source Is the Source 

For retail companies with full emissions data across their value chain, sourcing is the primary driver of carbon emissions. We found that, in 2023, 68% of emissions came from Source, far outweighing the next largest contributor, Use, which accounted for just 13%.  

Having the emissions data makes it possible for leaders to act with intention — to know where to focus, what progress looks like, and which functions offer the greatest leverage.  

But getting that data, especially Scope 3 emissions, is no small feat. Because these emissions come from outside a company’s direct operations – upstream suppliers and downstream partners – they require collaboration, connectivity, and often, new tools. 

Building or buying platforms to automate data collection is one piece of the puzzle. Just as important are partnerships: working with suppliers, vendors, and third-party experts to gain insight, improve transparency, and embed sustainability into core decisions like supplier selection. Let’s explore how leading retailers are gaining data, turning it into insights, and using them to reduce carbon emissions in sourcing.  

Data in Action: Retailers Turning Insight into Strategy 

Williams-Sonoma, where 46% of total emissions are tied to the Source function, partnered with sustainability consultancy Anthesis to conduct a comprehensive materiality assessment. This included stakeholder interviews, internal workshops, surveys, and benchmarking against global frameworks. The outcome was a materiality matrix that identified top priorities like sustainable materials, product circularity, carbon emissions, and supplier engagement. These insights became the foundation of Williams-Sonoma’s impact strategy, guiding long-term goal setting and reporting with a data-driven ESG roadmap that aligns internal operations with external commitments. 

Decathlon offers another strong example. With a striking 79% of its emissions stemming from sourcing, the company turned to EcoVadis in 2023 to assess the ESG performance of its indirect purchasing suppliers. The assessment framework has become central to how Decathlon manages supplier relationships. Suppliers falling below a set threshold must implement improvement plans or risk being phased out. For contracts exceeding €100,000, the EcoVadis evaluation is now a contractual requirement. To support the rollout, Decathlon has launched buyer training programs in ten countries, embedding ESG criteria directly into procurement practices. 

The Takeaway 

Many of the retailers in our data set lack a detailed emissions breakdown, which is a roadblock for identifying quick wins and strategic focus areas. That visibility requires tackling Scope 3 and the indirect emissions across your value chain – see our Scope 3 report for more.  

Part of this may involve partnerships like those described above to ensure you have the data you need to inform action. Start with your strongest partners and go from there; many large suppliers are already tracking emissions data and may be ready to share quickly. Also consider assessing if applying agentic AI to data collection could ease the burden of tracking down and cleaning data to get it ready for reporting.   

But don’t let the quest for perfect data stall action. There is likely low-hanging fruit you can address now, even without a complete picture. For example, identify win-win opportunities for your organization and the planet, such as assessing trucking routes to reduce total miles or evaluating alternative packaging options.  

To see a different data cut or to dig deeper into this topic, reach out to our VP, 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 retail companies’ sustainability reports, emissions across 15 categories of Scope 3, and partnerships.  

Further Reading 

• Research Report: The Scope 3 Data Revolution 

• Case Study: Walmart – Bringing Suppliers Along Your Scope 3 Journey 

• The Zero100 Podcast: Unravelling Supply Chain’s Scope 3 Data Conundrum