More and more retailers, both online and offline, are looking to reduce their carbon emissions. The Corporate Sustainability Reporting Directive (CSRD) requires larger companies to include Environmental, Social and Governance (ESG) metrics in their annual report and link them to their strategy.
Many retailers aim to be completely climate neutral by 2050. This is a huge challenge, as most of the emissions are beyond their direct control and often insufficiently mapped. Climate neutrality requires much more than just electric trucks. To get a full picture of their climate impact, companies use the Greenhouse Gas (GHG) Protocol, an international standard for calculating the carbon footprint. This footprint is divided into three scopes.
Scope 1: Direct emissions
This refers to CO₂ emissions directly associated with a company's operations, such as heating offices and distribution centres or using diesel in freight vehicles. These direct emissions typically account for less than 5% of total emissions. Companies can reduce them by reducing waste, using sustainable buildings, using alternative packaging and switching to emission-free transport
Scope 2: Indirect emissions from energy consumption
Scope 2 includes the emissions that arise from the production of purchased energy. Although these emissions occur externally, they are directly linked to the company's energy consumption. This part usually accounts for less than 5% of total emissions and can be reduced by switching to renewable energy sources.
Scope 3: Emissions in the chain
The vast majority of emissions - 90-95% - are in scope 3. This includes all emissions in the supply chain, such as: extraction of raw materials and production processes at suppliers (70%), transport of products (10%) and emissions at consumers (20%), e.g. from energy consumption, returns and waste disposal
To become fully climate neutral, companies need to look beyond their own logistics processes and take responsibility for emissions in their supply chain. This requires close cooperation with suppliers and logistics partners.
For the retail sector to meet its climate goals, an integrated approach is needed in which the entire chain takes responsibility. Companies must make clear agreements to reduce emissions in the chain. For this, reliable and standardised data is crucial. Given the huge number of products retailers offer, it is impossible to collect this data completely and accurately without a concerted effort. This requires: innovation in data registration and CO₂ calculation, cooperation between retailers, suppliers and logistics partners and standardisation of data exchange in the supply chain and reporting.
