Why do FTSE 100 Supply Chain Emissions Continue to Surge?

FTSE 100 companies saw their supply chain emissions rise by 62 million tonnes of CO2 last year, totalling 3.3 billion tonnes, according to research by INVERTO, a supply chain management consultancy and part of Boston Consulting Group (BCG).

This represents a 3% increase compared to the previous year. The study highlights that while many firms are making commitments to reduce their emissions, including Scope 3 emissions—those generated throughout their supply chains—progress remains slow and uneven.

Scope 3 emissions encompass the carbon output from the raw materials, goods and services used by companies, as well as emissions from the use of their products by customers.

Of the FTSE 100 companies, 86 reported on Scope 3 emissions in their annual or sustainability reports. However, this suggests the total figure could be higher, as not all firms included Scope 3 data in their reporting.

Inside the global decarbonisation push 

The rise in emissions among FTSE 100 firms mirrors a global trend.

BCG’s recent study, 'Boosting Your Bottom Line Through Decarbonisation,' reveals that Scope 3 emissions are continuing to climb globally. Even some of the largest US tech companies, which have pledged long-term reductions, have reported increases in their carbon output.

Despite these challenges, the study indicates that only 10% of European companies are reducing emissions in line with their stated ambitions.

Kiren Pandya, Principal at INVERTO, highlights the complexity of achieving net zero: “There is not going to be an easy glidepath to net zero. It will need a thorough strategic review of supply chains, careful planning and hard work.”

Among the FTSE 100, 37 companies reported an increase in supply chain emissions last year, while 32 achieved reductions. 

The remaining firms either reported no change, failed to provide specific Scope 3 data or were new to the index. This mixed performance raises concerns about whether the UK’s largest companies can achieve their net zero goals.

“These figures clearly demonstrate that despite the commitments made by businesses, there is still a long way to go to achieve net zero for the UK’s largest companies," Kiren adds. 

Encouraging signs of progress

Despite the overall increase in emissions, there are signs of progress as more FTSE 100 companies take steps to address their carbon footprint.

The number of firms reporting on net zero progress rose from 53 to 68 over the past year, and those with formal emissions reduction strategies increased from 50 to 78.

“This sharp year-on-year rise shows that a growing proportion of the UK’s biggest companies are becoming more transparent about their carbon emissions—and what they’re intending to do about them in the future,” says Kiren.

Companies with climate transition plans are more than three times as likely to reduce their emissions, according to BCG’s study. The most significant emitters among the FTSE 100—primarily oil, gas, mining and engineering firms—account for 92% of total Scope 3 emissions. This concentration highlights the importance of targeted efforts in these high-emission sectors.

“What’s really positive is that more and more companies are actively tracking their Scope 3 emissions and now have detailed plans in place to reduce them,” Kiren notes.

Steps to cut emissions

INVERTO advises companies to focus on simple, achievable measures first. Addressing supply chain inefficiencies, sourcing materials locally and decarbonising logistics and transport can deliver substantial reductions in the medium term.

Kiren explains: “The bulk of supply chain emissions reductions are relatively easy to realise in the medium term. Businesses should be focusing on the ‘low-hanging fruit’ in their Scope 3 emissions.”

Advanced technologies such as AI also hold promise. BCG’s research shows that companies using AI to optimise emissions reduction are 4.5 times more likely to achieve significant decarbonisation benefits.

The road to net zero is challenging, but with strategic planning and sustained effort, progress is possible.

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