Scope 3: Over Half of US Firms Admit Greenwashing Fears

A recent survey of procurement chiefs at 250 US firms found roughly half say they could be releasing less-than-accurate data around emissions their business is responsible for.

The study, from procure-to-pay software solution provider Ivalua, suggests as many as 53% of organisations are concerned they are at risk of unintentional greenwashing. 

It also shows only 44% of organisations claim they are ‘very confident’ they are accurately reporting on Scope 3 emissions in their supply chains. 

Scope 3 emissions are those produced not by a company itself but through activity up and down its value chain. It is estimated that Scope 3 emissions account for up to 80% of a company’s total carbon footprint.

The research also shows nearly two-thirds (64%) of organisations agree that the cost of not taking action far outweighs the cost of implementing green initiatives. 

And while 87% of organisations claim they’re confident they’re on track to meet net zero targets, many lack meaningful plans for:

• Adopting renewable energy (77%) 
• Reducing carbon emissions (73%) 
• Adopting circular economy principles (73%)
• Reducing air pollution (71%)
• Reducing water pollution (68%)

Greenwashing claims 'hugely damaging' – Gartner

The commercial and reputational damage that greenwashing – whether unintentional or not –  can wreak on a company was laid bare in a Supply Chain Digital interview last year with Gartner’s Olivia Montgomery.

She was referencing a Gartner report into reverse logistics at SMEs. Reverse logistics is what happens after the sale of a product, to recapture value at the end of a product's lifecycle, and is a key component of circular supply chains.  

Montgomery said Gartner’s study found a number of supply chain managers admitted that their employer’s communication around sustainability “doesn't align with what is actually happening”. 

She added: “These messages must be accurate because accusations of greenwashing can severely impact a brand’s reputation, especially if they are trying to attract the newer or younger customers, who are exceptionally engaged with sustainability. 

“Often you only get one shot to make sure messaging is honest and transparent.” 

Montgomery – Associate Principal Analyst, Project Management and Supply Chain Trends – said the report also found that fewer businesses are reporting that they are disposing of returned products responsibly, and that “there is room for improvement there”.

She added that businesses can no longer afford to focus solely on cost savings and operational efficiency, and pointed out that sustainability, “is now super-important to consumers”.

• Check out the latest edition of Supply Chain Digital and also sign up to our global conference series: Procurement & Supply Chain 2024
  ******
  Supply Chain Digital is a BizClik brand