Businesses urge Government to set reporting mandate on supply chain emissions

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A new report from the Green Alliance, released on Thursday (14 July) has called on the Government to set mandatory reporting requirements for companies on embedded emissions across the supply chain.

The report takes the findings from 20 anonymous interviews with businesses and industry experts across fashion, electronics and construction. It warns that many businesses feel frustrated that there are no mandatory requirements for reporting Scope 3 emissions.

Companies stated that voluntary commitments to measure their full value chain had uncovered the true scale of the task for decarbonisation, noting that much of their carbon footprint came from purchased materials, goods and services.

Embracing a circular economy would assist with decarbonisation methods, but the businesses interviewed felt that more Government support was required to help relevant sectors measure and report their value chain emissions in order to uncover how closed-loop materials and services could assist with decarbonisation.

Susan Evans of Green Alliance said: “We need a plan to move away from linear business models, focused on selling short-lived goods, to circular models aimed at keeping products in use for much longer. Companies making this change want more help from the government.

“Asking businesses to report on their value chain emissions, and supporting them to do so, will encourage innovation in circular, low carbon business models – helping the balance sheet and the planet. To drive demand, we need to move on from a voluntary system. The forthcoming Green Finance Strategy is surely the moment to make the UK the first country to set mandatory requirements for embedded emissions.”

Currently, construction is currently the only UK sector with some requirements for embodied carbon and the reuse of products and materials.

Many businesses are instead relying on voluntary initiatives to measure and report on embodied carbon through products and materials. Businesses told the Green Alliance that mandatory requirements would be of benefits for entire sectors, rather than just relying on a few voluntary leaders. “You want to bring the whole industry forward, not just have one or two people moving alone”, said one manufacturer.

The report also calls on Government to strengthen reporting requirements for large public contracts.

The Government has previously committed to introduce a mandatory sustainability disclosure regime (SDR) that is likely to cover the value chain for larger firms, but there is little detail or timeline as to when this will arrive and what the parameters will be.