The Ultimate Guide to Managing Supply Chain Emissions

For most businesses, the biggest chunk of their carbon footprint doesn’t come from what happens inside their four walls.

It comes from what they buy.

The manufacturing of the products you purchase (from raw material extraction through production), the energy used to deliver the services you procure, and the packaging, parts, and components that make your business run - all of these have a carbon footprint. Under the Greenhouse Gas (GHG) Protocol, these are largely captured in your Scope 3, especially Category 1: Purchased goods and services.

Examples of “purchased goods and services” emissions include:

A software company buying laptops, monitors, and office furniture (the emissions from making those items).
A retailer buying garments (emissions from fibre production, dyeing, manufacturing, packaging, etc.).
A construction firm procuring concrete, steel, insulation, and fit-out materials (emissions from production and processing).
Any business buying outsourced services - from marketing and legal support to cleaning and IT - which have emissions tied to the supplier’s energy use and operations.

The GHG Protocol notes that Scope 3 can represent over 90% of a company’s total Scope 1, 2 and 3 emissions in some cases. And large datasets back up the same pattern: CDP has reported upstream (supply chain) emissions averaging 11.4x operational emissions in supplier disclosures.

So if you’re serious about reducing emissions - or you’re being asked for credible carbon data by clients, investors, or bids - supply chain emissions are usually where the real work (and opportunity) sits.

What supply chain emissions actually are

When people say “supply chain emissions”, they sometimes mean a bundle of Scope 3 categories (transport, distribution, waste, business travel, use of sold products, and so on).

But the heavyweight category for most organisations is typically Purchased goods and services because it includes the embodied emissions in the things you buy.

That’s why supply chain emissions can feel slippery. They don’t show up on your utility bill. They don’t come out of your tailpipe. But they’re still a consequence of your business decisions - especially procurement decisions.

Why supply chain emissions get so big

There are two main reasons purchased goods and services emissions balloon quickly:

1) You’re not just accounting for your supplier, but their suppliers too

A single purchase can contain a whole chain of emissions:

Raw material extraction
Processing and manufacturing
Packaging
The supplier’s energy and fuel use
Multiple tiers of suppliers (tier 2, tier 3…)

GHG Protocol guidance explicitly recognises supplier “tiers”: your tier 1 supplier has tier 2 suppliers, and so on. The footprint of what you buy is the footprint of that whole upstream system, not just the tier 1 step.

2) Category 1 is broad by design

Category 1 covers everything you purchase that isn’t captured elsewhere in Scope 3 categories. In practice, that’s a lot of line items. Which is why it’s often the single largest piece of Scope 3.

This is also why your first attempt at measuring supply chain emissions can feel intimidating.

But you don’t need perfect data on day one - you need a credible baseline and a clear plan to improve data quality over time.

“Isn’t that double counting?” Yes (and that’s the point)

If you measure supply chain emissions properly, you will run into the realisation that the same emissions can show up in multiple organisations’ footprints.

Your supplier’s Scope 1 and 2 emissions (fuel and electricity used in their factory) may appear in your Scope 3 (because you’re buying their product). That kind of “double counting within scope 3” is an inherent feature of value chain accounting.

Why would the system allow that?

Because the intent isn’t to create one single, perfectly non-overlapping global ledger. The intent is accountability and influence.

If everyone in a value chain measures the emissions they’re connected to, more people have a reason to act, and more decision-makers can push reductions upstream.

It also prevents a loophole: if companies only focused on Scope 1 and 2, they could “reduce” emissions on paper simply by outsourcing the messier parts of their operations (shifting emissions from Scope 1 to Scope 3).

A simple example

If you only counted the store’s electricity use (Scope 1 and 2) when buying a steak, it might look similar to buying a carrot, because the store energy is roughly the same per kg. But the real climate impact of beef is mostly upstream (e.g., methane and feed supply chains), which sits in Scope 3. Ignoring that wouldn’t just be inaccurate - it would incentivise the wrong choices.

So yes: double counting happens and it’s one of the core mechanisms that makes Scope 3 useful.

How to measure supply chain emissions in practice

There’s a reason teams often stall here: purchased goods and services can involve hundreds (or thousands) of suppliers and products. A practical approach is to measure in layers.

Step 1: Start with a spend-based baseline (fast, good for hotspots)

The spend-based method estimates emissions by multiplying your spend in a category by an emissions factor (typically derived from environmentally-extended input-output, or EEIO, models).

The GHG Protocol lists spend-based as one of the accepted approaches for purchased goods and services - especially as a starting point where supplier-specific data isn’t available.

Example calculation (illustrative):

If you spent £50,000 on a procurement category and the emissions factor is 0.0005 tCO₂e/£, then:

£50,000 × 0.0005 = 25 tCO₂e

Spend-based isn’t perfect (it’s based on averages), but it’s incredibly useful for:

Building a first full picture quickly
Identifying hotspots (categories that dominate emissions)
Pinpointing which suppliers matter most
Avoiding “analysis paralysis”

Step 2: Use the baseline to prioritise (don’t boil the ocean)

Once you’ve got that first pass, you'll probably realise that a small number of categories and suppliers drive most of the footprint.

So your next move is to focus effort where it pays off:

Top emission categories (often materials, inventory, IT, packaging, logistics services)
Top suppliers by spend and estimated emissions
Categories where you have clear levers (e.g., specifications, material choices, product substitutions)

Step 3: Improve data quality by moving up the hierarchy

GHG Protocol guidance for Category 1 lays out multiple methods, but an easy way to interpret this is:

Spend-based gets you started.
Activity-based gets you closer to reality (e.g. kg of aluminium vs £ spent).
Supplier-specific is the long-term goal for key suppliers (e.g. product carbon footprints, EPDs, cradle-to-gate LCAs in some sectors).

What “activity-based” looks like for purchased goods and services:

Physical quantities (kg, litres, units purchased)
Material breakdown (e.g. % recycled content, specific grades)
Supplier production data (where suppliers can share it)
Product carbon footprints / EPDs (common in some industries, like construction products and certain types of IT equipment)

Step 4: Engage suppliers to get better data (without making it painful)

Supplier engagement is where a lot of teams get stuck, not because it’s impossible, but because it’s easy to do it in a way that creates friction:

Huge spreadsheets with unclear requests
No explanation of “why”
No guidance on what “good” looks like
No feedback loop (suppliers send something, then hear nothing)

In practice, the best supplier data requests are:

Targeted (only ask key suppliers first)
Simple (one clear request, minimal admin)
Structured (so the data is usable)
Supportive (especially for suppliers without in-house sustainability expertise)

Seedling built an automated Supplier Engagement Tool for exactly this: a structured request form suppliers can complete quickly, with responses pulling directly into your footprint so you’re not stuck cleaning messy email replies.

Step 5: Be transparent about assumptions and improve year on year

Your first Scope 3 baseline will never be flawless. That’s normal.

What matters is that you can explain:

What methods you used where (spend-based vs supplier-specific)
Which categories are estimated vs measured with higher-quality data
What you’re doing next to improve accuracy

That’s how you build trust, internally and with external stakeholders.

How to reduce supply chain emissions

Measurement is only useful if it leads to action. The good news: there are almost always levers you can pull.

Quick wins: things you can control immediately

Even before deep supplier engagement, many businesses can reduce emissions by changing what they buy and how much they buy.

Examples:

Increase recycled content in packaging or materials (where performance allows).
Switch to refurbished or remanufactured options (e.g., refurbished IT equipment instead of new).
Choose lower-carbon substitutes (materials, ingredients, product specs).
Reduce high-impact purchases where they’re discretionary (even the Christmas party catering choices).
Design out waste (less material, fewer components, longer lifespan).

These actions matter because they reduce demand for high-emission supply chains, often the fastest route to measurable change.

Why supply chain reductions can be hard (and what to do about it)

In many cases, supply chain emissions “sit” with suppliers operationally, so you can’t just flip a switch.

Common blockers include:

Limited supplier choice (specialist products, regulatory constraints)
Long contracts and slow procurement cycles
Switching costs (quality, reliability, lead times)
Lack of supplier data (or inconsistent methodologies)
Low buying power (you’re a small share of a supplier’s revenue)
Global supply chains with limited transparency

So the strategy becomes: procurement + influence.

Build reductions into procurement (new suppliers)

This is where sustainable procurement stops being a policy PDF and becomes a real lever.

Practical moves:

Add carbon questions into onboarding and RFPs (e.g. do they measure emissions? do they have targets? can they provide product footprints for key items?)
Weight sustainability criteria in scoring (so it affects decisions, not just paperwork)
Prefer suppliers who can show progress with data (even if they’re early-stage, as long as it’s credible and improving)
Use contract clauses where appropriate (reporting expectations, data sharing, improvement plans)

Engage existing suppliers

For your highest-impact suppliers, reductions usually come from:

Helping them measure their own hotspots
Co-developing improvement plans (materials, energy, logistics, packaging, process changes)
Setting shared timelines and check-ins
Creating incentives (preferred supplier status, longer-term commitments, shared savings)

This is also why Scope 3 “double counting” isn’t a flaw - it’s a nudge toward collaboration across the value chain.

Conclusion: where Seedling can help

Managing supply chain emissions is no longer a “nice to have” - it’s quickly becoming part of doing business responsibly (and competitively).

The most effective approach is steady and pragmatic:

Start with a spend-based baseline to find hotspots
Move to better (activity-based and supplier-specific) data where it matters most
Use procurement and supplier engagement to drive real reductions

Seedling supports teams through that journey: from an initial spend-based hotspot analysis, to improving accuracy with more specific data over time (without turning it into an endless admin project). And with Seedling’s automated Supplier Engagement Tool, it’s much easier to collect usable emissions data from key suppliers in a consistent format, and bring it straight into your footprint.

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