Retailers' Climate Roadmap: Charting Paths to Decarbonized Value Chains
Overview
Retailers face significant challenges in reducing their Scope 3 emissions, which represent a complex array of value chain emissions. These emissions are generated through numerous, disparate, and often highly fragmented value chains involving multiple tiers of suppliers and inputs. The emissions span six energy and land-use systems: agriculture and forestry, building, industry, mobility, power, and waste.
Key Data and Insights
- Total Retail Sector Emissions: The total retail sector emissions amount to approximately 7,755 million metric tons of CO₂.
- Scope 3 Emissions Breakdown:
- Upstream Emissions: About 80% of a retailer's Scope 3 emissions are generated upstream in product value chains via feedstock production, materials and components, processing and manufacturing, and packaging.
- Energy and Land-Use Systems: Emissions are distributed across six systems: agriculture and forestry, building, industry, mobility, power, and waste.
- Retail Operational Emissions: Retail operational emissions (Scope 1 and 2) account for 23.6% of total retail sector emissions.
Strategic Decarbonization Actions
This report outlines seven strategic decarbonization action themes, illustrating how retailers and other value chain stakeholders can leverage economic resources, natural and physical resources, human resources, low-carbon technology, and data transparency to achieve emissions reductions.
- Engagement and Efforts: Reducing Scope 3 emissions requires engagement and efforts from all value chain actors, including suppliers, distributors, and consumers.
- Feasibility: By 2030, reducing the average retailer’s Scope 3 emissions by 15% at a system level is feasible using existing technologies. Innovations could enable an additional 40-50% reduction.
- Strategic Themes: Retailers can play various roles, ranging from leading and scaling initiatives to collaborating and catalyzing decarbonization efforts across the retail value chain.
Conclusion
Retailers worldwide are embracing ambitious sustainability goals and wide-ranging initiatives to reduce product value chain emissions. By engaging suppliers to improve energy efficiency, reduce waste, and transition to renewable energy sources, retailers can make significant strides towards decarbonization. The report emphasizes the importance of strategic deployment of resources and collaboration among stakeholders to achieve meaningful emissions reductions.