From the Frontlines of Scope 3: Key Lessons from Supplier Engagement Initiatives

Key Points

• Recognition of the importance of supplier engagement to meet climate goals is growing: targets, disclosures, and regulatory requirements regarding corporate supplier engagement are rapidly increasing as companies start to tackle Scope 3 emissions.
• Companies are making strides, though shared challenges persist: companies are increasingly implementing climate-related requirements for suppliers and providing upskilling and capacity-building support; however, adopting hard incentives and achieving measurable reductions remains a challenge.
• BSR guidance is here: BSR, We Mean Business Coalition, and its partners have distilled common questions and real-world insights from companies of all sizes into practical tips for engaging with suppliers on climate.

When it comes to climate action, Scope 3 emissions can feel like an iceberg—massive, unavoidable, and, if left unaddressed, threatening to sink real climate progress. Yet navigating this challenge also presents one of the greatest opportunities to chart a course toward meaningful climate action.  

 A key strategy lies in working closely with suppliers to tackle emissions together. More and more companies are requesting suppliers’ emissions data and providing them with resources to set climate targets. This growing commitment signals a clear need for deeper collaboration and a desire to scale climate action across value chains. As voluntary bodies like SBTi and jurisdictional authorities alike push for greater disclosures around supplier engagement, and as intensifying climate impacts continue to manifest as risks for businesses worldwide, the urgency and opportunity to scale supplier collaboration have never been clearer. 

To accelerate companies’ progress on supplier engagement, BSR, in partnership with We Mean Business, CDP, Ceres, The Environmental Defense Fund, and Exponential Roadmap Initiative hosted The Supplier Cascade. This collaborative initiative brought together global companies across industries to discuss effective supplier engagement strategies, learn from each other’s challenges and successes, and pilot the Supplier Cascade approach.  

BSR observed three themes regarding company supplier engagement initiatives that reflect the progress made, remaining challenges, and considerations for other companies to take forward: 

1. Supplier Engagement Looks Different for Everyone 

Companies pursue supplier engagement through a range of approaches. Some prioritize and segment suppliers by spend, others by emissions, materials, by how advanced (or nascent) suppliers are on sustainability, or simply by the strength of the existing relationships. The approach a company takes can also be influenced by the level of connection between internal sustainability and the procurement team.  

While certain companies are developing their own standards, scorecards, metrics, and incentive structures to engage suppliers, others are aligning with, or establishing, industry norms and common practices (e.g., Transform to Net Zero Supplier Transformation Framework, Pharmaceutical Supply Chain Initiative Principles for Responsible Supply Chain Management, Responsible Business Alliance Supplier Code of Conduct). And whereas some companies focus on direct training and upskilling to report or to decarbonize, others are exploring other means of incentivizing action—both financial and nonfinancial.   

The Takeaway: There is not a single standard approach to prioritizing and engaging suppliers across the value chain. Buyers and suppliers alike need greater industry collaboration and alignment to streamline expectations and actions. Survey fatigue, duplicative scorecards, and divergent standards and expectations among customers all burden suppliers, so despite different approaches to supplier engagement, going it alone is rarely the answer. 

2. Supplier Responses Will Vary 

Suppliers bring different levels of readiness, capacity, and resources to climate action. Some are highly informed and are already taking action or collaborating with other partners, whereas others are at the very beginning of their journey. At the same time, many suppliers operate in thin-margin industries and face extreme pressures to keep costs low, limiting the financial and human resources they can dedicate to internal climate actions or otherwise complicating their engagements with buyers.  

Suppliers’ responses are also shaped by external factors, including regulations, policy environments, other stakeholders’ demands, and the degree to which buyers are willing to truly partner with and support their suppliers on climate. These factors all serve to enable or constrain progress. In addition, language differences and cultural contexts can add further complexity to engagement. 

The Takeaway: Supplier engagement does not occur in a vacuum. Companies must recognize that suppliers are navigating diverse local contexts, resource constraints, and various climate- and sustainability-related demands from other customers. Progress is accelerated when buyers identify and leverage synergies with their peers to align on climate-related expectations and provide differentiated supplier support to match their asks of suppliers. 

3. Data Is Critical, but Should Not Be a Barrier 

Collecting supplier data is a significant undertaking. Companies often engage with large numbers of suppliers, work across vast and complex datasets, and navigate multiple platforms that can either facilitate or complicate progress. Challenges in obtaining data can be multi-faceted, ranging from simply getting suppliers to respond to requests, to verifying the quality or accuracy of numbers reported, to comparing potentially unlike datapoints, metrics, or calculation methodologies.  

The Takeaway: While data is essential, it should not become an obstacle or the sole focus of supplier engagement efforts. Companies can ease the burden by remaining flexible on how and where information is collected and disclosed, keeping the focus on driving progress. For example, for non-responsive suppliers, companies may supplement data with publicly available information. To ease the reporting burden on suppliers and minimize the need for divergent tracking efforts among buyers’ procurement staff, sustainability teams may pursue cross-industry efforts to align on asks of suppliers.  

Looking Ahead:  

Momentum is building on supplier engagement, and incentive schemes are showing positive results. In 2024, 41% of companies that disclosed to CDP reported engaging suppliers on climate, and 52% of suppliers were more likely to reduce annual emissions when offered financial incentives. According to CDP, training and upskilling can increase the likelihood that suppliers complete climate-related assessments by 1.7 times, and suppliers who received support from buyers to set a science-based target were 2.6 times more likely to do so.  

However, challenges remain, and adoption of stronger supplier engagement efforts remains low. In 2024, only 13% of buyers included climate-related requirements in supplier contracts, and only 2% of companies offered financial-based rewards.  

Companies have an opportunity to translate supplier engagement into real progress on Scope 3 reductions by strengthening engagement efforts and integrating climate-related expectations into procurement processes. At the same time, companies should not lose sight of the need to accompany climate-related asks with strong incentives and support mechanisms, and should ultimately collaborate to produce measurable emissions reductions. These ‘below the waterline’ collaborations are essential to surface and address the hidden challenges in the iceberg that is Scope 3.   

To further help companies, BSR and Supplier Cascade partners have developed new guidance that dives deeper into the lessons learned, successes, challenges, and case studies from the Supplier Cascade collaboration. By working hand in hand with suppliers, companies can chart a new course toward meaningful impact. 

Interested in working with BSR to address your company’s Scope 3 emissions ? Contact  BSR’s Climate & Nature team.   

Acknowledgment: The Supplier Cascade campaign was created and funded by the We Mean Business Coalition. 

This article was originally published at the BSR website "Sustainability Insights" and is written by Amina Azmat, Manager, Climate and Nature, Adam Fishman, Associate Director, Transformation, Ariela Levy, Associate, Consumer Sector at BSR.