Supply chain emission analysis

Cross-fertilize the spend analysis with GHG-emission indicators

To do a supply chain emission analysis, the organization needs to have a thorough and up-to-date spend analysis in place. GHG-emissions indicators are freely available at numerous sources, in Scandinavia the most thorough is available through The National Agency for Public Procurement.

One key aspect of the analysis is to ensure that the spend analysis is on level with the GHG-emissions indicators and vice versa. It is also vital that there is a similar data granularity in both the spend analysis and the GHG-emissions indicators.

The supply chain emissions analysis is a visualization of the distribution of GHG-emissions impact per category by cross-fertilizing two data sources.

The next step on the journey is to prioritize categories where the impact (or potential) is high as well as mapped against feasibility, i.e. how easy or difficult it is to implement a change in the selected category. Once the prioritization is done, it is recommended to further iterate the result to ensure that the analysis is correct. An environmental spend analysis is based on spend volume, so it is important to understand both the environmental impact and whether there are other reasons than purchase volume that affect spend. A common example here is climate compensation for travel, which makes the trip itself more expensive, but for that matter does not affect the environment negatively.

The environmental spending analysis then becomes an important basis for discussion for the development of environmental work in the organization, and provides purchasing with important insights that can be used in future procurements and communication with suppliers.

The positive effects of doing a supply chain emission analysis

• A mapping of the supply chain’s emissions is often a good basis for discussion in the organization to develop sustainability work
• The environmental spending analysis is a good starting point for prioritizing environmentally focused improvement work at category level
• Carrying out an environmental spending analysis is a knowledge journey for purchasing and for the entire organization
• Working with improvements in the environment and sustainability is a way to attract and retain competence
• Purchasing is used to working category-specific and cross-functionally. Running improvement projects with an environmental focus therefore suits purchasing organizations well and is a way to increase the strategic importance of purchasing in the organization.