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February 24, 2025
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Measuring carbon emissions in a retail company is a complex challenge. Although calculating the impact of internal operations (Scope 1) and energy consumption (Scope 2) is already a challenge, the real difficulty arises when extending the analysis to the value chain. The industry's own supplier structure, logistics and distribution add multiple variables that influence the carbon footprint. In this context, Scope 3 issues represent the greatest challenge, since they occur outside the company's direct operations, but are a consequence of its activity. Understanding and managing these emissions is key to making progress in reducing environmental impact.
Retail has a key peculiarity: most of its carbon footprint is generated in the supply chain, before products reach stores or the final consumer. To measure real impact, it is essential to collect data from hundreds or even thousands of suppliers, each with different levels of maturity in sustainability and different information formats. This is where the first major challenges appear:
A key aspect that is often overlooked is shared responsibility within the value chain. Although it is easy to commit to reducing emissions under the direct control of the company —such as business trips or energy consumption—the real challenge lies in assuming co-responsibility for the environmental impact of the goods it markets. Without these products, the company would not exist, and that is where the biggest challenge arises: to recognize that the carbon footprint does not end with the sale, but continues with the use and disposal of the products by customers.
In addition, many suppliers do not have the same level of maturity in sustainability. While large multinationals have advanced systems to manage their carbon footprint, many small and medium-sized companies are still in the early stages and respond to requirements rather than anticipate them. In this context, it is essential that large buying companies exert their influence to drive improvements throughout the value chain. Unlike a small business with little negotiating capacity, a large scale retailer can demand changes from its suppliers and generate a real impact.
Let's design a tailor-made strategy
One of the biggest challenges in measuring Scope 3 in the retail industry is not only the number of suppliers involved, but also the diversity of products that each one offers. The same product can come from different suppliers, and a single supplier can supply multiple products. This makes identifying the most relevant actors in terms of carbon footprint a key step.
Fundamental learning has been the implementation of materiality analysis to prioritize the most strategic suppliers, both in terms of business and environmental impact. Instead of covering the entire value chain, this approach makes it possible to identify those who generate the highest costs, concentrate the highest proportion of emissions, have a high purchasing frequency or are irreplaceable for the business. Thanks to this criterion, some companies have managed to reduce the number of suppliers analyzed from thousands to a more limited group, which facilitates deeper and more strategic work without losing representation in the measurement of emissions.
However, this approach presents an additional challenge: strategic suppliers may change from year to year due to variations in purchases, adjustments to stock, or business decisions. This dynamic hinders continuity in the relationship with suppliers and requires a constant review of the measurement strategy.
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Despite the difficulties, there are ways to make the measurement of Reach 3 in retail more effective. Some key strategies we've identified include:
Measuring Scope 3 in retail is not just a technical issue, but a task that requires a strategic vision and effective management of relationships with suppliers. Success in this process does not depend solely on the company, but on collaborative work with its value chain and on the ability to integrate sustainability into business decision-making. The sooner this journey begins, the greater the opportunities to generate positive impact and lead change in the industry.
Access our job opportunities portal to find out about open searches or add your CV to our database.
