Emissions from Supply Chain Tiers 2 and 3

Emissions from supply chain Tiers 2 and 3 refer to greenhouse gas (GHG) emissions generated beyond a company’s immediate suppliers (Tier 1), extending to the suppliers’ suppliers (Tier 2) and further upstream (Tier 3). These emissions often represent a significant portion of a company’s total Scope 3 emissions, encompassing raw material extraction, component manufacturing, and other indirect activities. Managing and reducing these emissions is challenging due to limited visibility, data availability, and control over distant suppliers. However, addressing Tier 2 and 3 emissions is critical for comprehensive corporate climate strategies, as they contribute substantially to overall environmental impact. Companies increasingly engage with these tiers through supplier collaboration, capacity building, and setting sustainability criteria to drive emissions reductions. Regulatory frameworks and reporting standards, such as the GHG Protocol and emerging regulations, also encourage transparency and accountability across extended supply chains. Ultimately, tackling emissions from supply chain Tiers 2 and 3 is essential for achieving ambitious climate goals and fostering sustainable value chains.