Enterprise climate platform Watershed has launched an innovative solution to help businesses reduce carbon emissions across their supply chain. The Watershed Supply Chain tool, which was announced on Nov. 1, will address indirect – or Scope 3 – emissions that come from vendors and suppliers. An estimated 80% of emissions globally are classified as Scope 3, which makes reductions in the area a key factor in achieving climate goals.
Until now, addressing Scope 3 emissions has been a difficult task for most companies, as it required complex collaboration with vendors and suppliers and large dedicated teams. Watershed aims to solve that issue by making measuring, understanding, and reducing emissions across businesses’ supply chains faster, easier, and more effective.
This solution comes in the context of important new global regulatory actions. In the United States, the Securities and Exchange Commission (SEC) has proposed rules to formalize climate-related disclosures. In the UK, the Financial Conduct Authority (FCA) rules that require corporate disclosure of Scope 3 emissions will take effect in 2023.
Such regulatory actions follow a wave of voluntary business goal-setting. As of the end of last year, 96% of companies following the Science Based Targets Initiative (SBTi) recommendations had established reduction goals for Scope 3 emissions.
Watershed Supply Chain allows companies to meet Scope 3 reporting requirements and make real reductions in their supply chains. It takes a few days for the solution to produce a Scope 3 emissions footprint using privately and publicly disclosed financial and climate data, as well as insights into individual supplier emissions.
Relevant: BCG: Only 10% Of Companies Measured Their Emissions Comprehensively In 2022
The tool then overlays the customer supply chain footprint against suppliers’ climate programs and commitments, allowing customers to prioritize engagement with suppliers that bring the highest climate-positive impact. Watershed Supply Chain also generates tailored recommendations for suppliers with input from customer sustainability or procurement company teams.
“With Watershed Supply Chain, we’re turning the once-daunting challenge of measuring and acting upon Scope 3 emissions into an eminently scalable task,” said Watershed co-founder Taylor Francis. “Watershed Supply Chain makes it easier than ever for companies to partner with their vendors to tackle Scope 3 emissions and drive decarbonization.”
Boom Supersonic and Klarna are among Watershed Supply Chain’s first customers.
“Sustainability is core to our mission at Boom, which is why we are using Watershed to help us achieve net zero carbon by 2025,” said Ben Murphy, Vice President, Sustainability at Boom Supersonic. “Watershed Supply Chain will provide us with a high level of carbon data fidelity, allowing us to make clear and informed decisions around how we action comprehensive decarbonization in lockstep with our suppliers to mutually enable emissions reductions across our supply chain.”
“Watershed Supply Chain helps us to prioritize climate action in our supply chain, enabling us to focus on our most material suppliers,” said Salah Said, Head of Sustainability at Klarna. “Watershed will provide the latest climate education and actionable reduction paths for our partners to collaborate in achieving Klarna’s highest level sustainability goals.”
To date, Watershed has raised over $100 million from companies like Kleiner Perkins and Sequoia and counts climate leaders like Al Gore, Mark Carney, and Christiana Figueres as advisors. This June the San Francisco- and London-headquartered company introduced Watershed Finance to help financial institutions manage emissions across their portfolios.
Read more: New Report Expects Emissions Reduction Industry To Reach $1.4T By 2027
