The business landscape is changing for small and medium-sized suppliers. Large companies are increasingly asking their suppliers to measure and report their carbon emissions when bidding for contracts and on an annual basis thereafter. This isn't just another environmental initiative - it's becoming a crucial factor in winning and keeping business relationships.
For large organisations, this approach makes strategic sense. Many companies find that up to 80-90% of their overall carbon footprint comes from indirect Scope 3 emissions within their supply chain, making supplier emissions reporting a top priority. By engaging suppliers in carbon measurement and reduction efforts, large companies can:
- Drive meaningful progress toward their climate commitments.
- Identify emissions hotspots throughout their value chain.
- Mitigate climate-related business risks.
- Meet growing investor expectations.
- Build resilience against future carbon policies.
Forward-thinking organisations recognise that effective climate action requires collaboration - they're building a more sustainable ecosystem that benefits all participants.
The Trickle-Down of Carbon Reporting Requirements
Perhaps more important for smaller companies is the cascading effect these reporting requirements are having. They are leading to large businesses asking their (often smaller) suppliers to provide carbon emissions data so they can report on their Scope 3 emissions. So if you supply to large businesses, you may need to start measuring your emissions too.
Research by the Carbon Trust reveals that this shift is significant: while 60% of multinational companies haven't yet looked at their indirect emissions, 42% plan to do so within the next few years. More importantly, 50% of these large companies intend to select their suppliers based on carbon performance, and 66% are willing to pay a premium for products and services with lower emissions. For small suppliers, this represents both a challenge and an opportunity.
As Simon Heppner, Co-founder at Net Zero Now and Chief Sustainability Officer at Ecologi, says, “Carbon accounting is a daily reminder that no business operates in isolation—its responsibilities extend throughout the value chain. Successful climate strategies depend on accurate supplier emissions data and active collaboration to reduce the carbon intensity of the products and services they provide.”
Making Carbon Measurement Manageable
For many small businesses, measuring carbon footprint might seem daunting. However, it doesn't have to be! It's becoming as fundamental as tracking your finances or managing quality control. Net Zero Now (An Ecologi Company) provides streamlined tools specifically designed for small suppliers facing tender requirements and ongoing annual reporting obligations. We offer user-friendly solutions so you can measure and report your footprint consistently throughout the year, without requiring you to become a carbon expert overnight.
The change is happening because large companies are under pressure to reduce their environmental impact across their entire supply chain. They can't meet their climate goals without involving their suppliers. According to the Carbon Trust, many companies discover that up to 80% of their overall carbon footprint comes from indirect emissions through their supply chain.
Getting Started Is Simpler Than You Think
The first step is to appoint a climate champion who can lead your sustainability efforts. Next, identify your firm's data holders (like IT, bookkeeping, and operations teams) who can help access the information you'll need. Then track your carbon emissions across all three categories - Scope 1 (direct emissions from your operations like company vehicles), Scope 2 (indirect emissions from purchased electricity), and Scope 3 (all other indirect emissions in your value chain). With this data collected, you can identify your biggest emission sources and develop targeted reduction strategies. If you do not measure, you cannot make informed decisions about where to target your efforts - nor can you communicate your good work!
Many large companies understand that their smaller suppliers need support with this transition. Some are offering guidance, tools, and resources to help suppliers measure and reduce their emissions. For example, BT has introduced a Climate Change procurement standard for all its suppliers and holds workshops to help suppliers develop their own carbon reduction policies.
Benefits Beyond Compliance
The benefits go beyond just keeping customers happy. Companies that understand their carbon footprint often discover ways to operate more efficiently. They're also better prepared for future climate regulations and rising energy costs. Most importantly, they're positioning themselves as forward-thinking suppliers in a market that increasingly values environmental responsibility.
Looking ahead, carbon footprint measurement is likely to become as standard as quality certifications or safety compliance. Small businesses that prepare now will have an advantage over those who wait until it becomes mandatory. They'll be ready to provide the information customers want, demonstrate their environmental commitment, and compete effectively in a changing market.
Start Small, Improve Gradually
The most important thing to remember is that you don't need to achieve perfection immediately. Start with what you can manage, build your understanding gradually, and keep improving over time. Your customers are more likely to value your commitment to improvement than expect instant expertise.
This shift represents both a challenge and an opportunity. While it requires some new learning and systems, it also offers a chance to strengthen your business, reduce costs, and secure your position in future supply chains. The key is to start preparing now, before it becomes an urgent requirement.
Edward Herbert
Professional Services Lead
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