Scope 3 Engagement with Sumday

May 27, 2024
7 Minutes

Scope 3 Engagement with Sumday

The Problem

Most companies have started measuring their emissions. The majority comes from the supply chain (scope 3 - Purchased Goods and Services). In most cases, over 80% of a company’s footprint is currently based on the multiplication of spend data by an industry average emission factor. That number doesn’t come down, unless the company spends less. Even if suppliers are reducing their emissions, that isn’t reflected in the average. Basically, it’s impossible to reach net zero or track scope 3 reduction without data from suppliers over time.  

Collecting data from thousands of suppliers

Collecting accurate emissions data from thousands of suppliers is a significant challenge. Simple forms or quick calculators won't suffice. Companies need to support their suppliers in making this kind of accounting and reporting part of their regular business practices, ensuring audit-ready data is available at least annually. This starts to provide transparency over progress so those making headway can be rewarded and the risks of greenwashing are reduced. We need to see the same rigour and trust in this GHG accounting as we expect from financial accounting. 

Sumday is now - what are we aiming for? 

Companies need to replace average scope 3 emissions with actual data provided by their suppliers. Emissions should be driven by the supplier’s key inputs rather than arbitrary numbers from sources like the US EPA. This requires professional judgement. Companies need to assess if the emissions data provided by suppliers meets the criteria for replacing an average. This decision will increasingly fall to finance teams or external accountants, with appropriate disclosures accompanying these decisions (just like financial accounting). This should be easy to see and assess - and that’s exactly what Sumday is focused on. We need better quality GHG accounting and easy distribution of that data to stakeholders (let’s be honest, how many excel forms asking for emissions data can we expect a company to fill in each year - it has to change).  

The Sumday Solution

AI won’t magically solve this (for now, at least). There are human problems we have to overcome. They often stem from a lack of context, education and confidence. Let’s break down the key project steps and address the human problems that are often in the way of progress. 

Step 1: Get the right people in the room and upskill them

The Human problem: Few people in the company understand why collecting this data is important, nor do they know what to do with it once it comes in. Gather champions from Sustainability, Procurement, and Finance—what we call the golden triangle—and invite them to join your team in Sumday.

Each team has a crucial role in preparing data according to standards and engaging suppliers. Provide each team member with upskilling opportunities through the Sumday Academy:

  • Finance: This data will end up in the likes of the annual report. It's time to understand the standards and support processes and systems to ensure reporting is audit-ready. Sustainability teams don’t have time to become accountants anymore.
  • Sustainability: Use this data to influence decision-making and drive faster action. Learn how to build an influential business case and utilise supplier data effectively. If you’re leading the pack on this project, feel confident bringing more stakeholders in with access to resources for them. 
  • Procurement: You have the relationships with key suppliers. The company needs data from them, and you’re best positioned to have practical conversations about why and what is needed. But there’s nothing more annoying than having information sent to suppliers that you don’t understand or aren’t part of. Sumday makes sure you’re feeling confident. 

Step 2: One size does not fit all - group suppliers

The Human Problem: Companies assume suppliers have no valuable data to share, so it can feel uncomfortable ‘bothering’ suppliers with a data request or creating work internally that feels pointless. Instead, we do nothing to engage suppliers for yet another year.

Split suppliers into three categories (or more as needed):

  • Mature: Well into their journey, usually public companies.
  • Starting: Mid-sized companies likely having customers with reporting obligations or facing them in the next few years.
  • Learning: SMBs taking voluntary action or unaware of why their customers care but willing to engage.

Tailor the Communication

Tailor your communication to fit the audience. Engage SMBs in a supportive and educational way rather than with an overwhelming spreadsheet. Send an introductory email to each group outlining:

  • Why you are reaching out
  • Your goals and targets
  • What you will be asking for and deadlines
  • The support you will provide (e.g., access to Sumday)
  • How they can get help (e.g., Sumday accounting help desk)
  • A date for a webinar with a Q&A opportunity

We help you prepare this communication based on the support you are providing through Sumday and the templates you choose for your request. It’s about setting context, helping suppliers understand the why and letting them know you are passing on support, not just an admin headache. 

Step 3: Send the Request

The Human Problem: We all feel a little uncertain about what we need to ask suppliers in the first place. What is too much? What’s not enough? This leads to procrastination.  

Sumday provides template questions designed to help you replace averages with actuals and track emission reduction progress. These questions are based on best practice advice. 

When you send a quest to your suppliers in Sumday they receive:

  • Their own Sumday account with a home for all data requests: This reduces the admin burden, if all customers ask through Sumday, they can answer with saved responses and link up to date audit ready data (goodbye 1,000 forms a year). If you use template questions, suppliers will also have access to tutorials on each question type and tailored resources. 
  • Free Resources to provide the answers: Included with your subscription, suppliers receive 60 days free access to all accounting tools to prepare their own baseline, all courses in the Sumday Academy and access to the Accounting support help desk for questions along the way. 
Send custom requests

Coming soon: Nobody wants to be that company, sending suppliers multiple questionnaires from different platforms. You can customise Sumday templates, add your own questions and save your own templates. Create different questionnaires for different categories of suppliers for example.  

Step 4: Track Responses and Reduction

The Human problem: Once you have some data, what’s next? Sustainability teams may feel unsure about replacing averages with this data, and finance teams might be distanced from the project. What’s the point in asking if we don’t know what to do with it? 

This isn't about expecting every company to provide comprehensive emissions data overnight. However, understanding who engages and who doesn’t is valuable data.

Once you send a request you can track how suppliers engage. Use this data to inform your ongoing engagement strategy and projects that may offer the biggest bang for carbon buck. Consider engaging strategically with key suppliers who don’t respond to understand their strategies and emission reduction plans. Learn from SMBs taking voluntary action, and create case studies to spotlight and celebrate their achievements, adding value to your relationships.

If you're serious about updating procurement policies to include emissions reporting and reduction progress, this initial request and offer of support can help pave the way forward in an inclusive way. Small sustainability teams have limited resources, so understanding where suppliers stand helps prioritise next steps. It can be interesting to report on:

  • Who ignored the request
  • Who has started GHG accounting 
  • Who can provide the information you want to see
  • What barriers suppliers face in emission reduction
Replace averages with actuals

Sumday supports your team in identifying where you can confidently use supplier-provided emissions data to replace averages. As more suppliers provide data annually, Sumday is developing features to simplify this process and upskilling your team to recognise what to look for. We’re also making it easy to document and disclose your decisions, facilitating better internal communication and easier external reporting.

The outcome?

By asking suppliers key questions and passing on:

  • Access to an academy full of upskilling resources
  • A help desk with answers to their questions
  • Accessible tools to set their own baseline; and 
  • Resources on how to reduce their emissions

…you're the customer that helped these companies come along on the journey. Sumday that’s going to be business as usual, you can help make that happen. It may just be one of the best ways to have an impact on scope 3 emissions right now. 

Get started today.