7 Regenerative Strategies to Improve Your Carbon Footprint
Supply chains are a major source of greenhouse gas emissions. In fact 60% of global emissions are generated by supply chains. Decarbonising supply chains is not only vital to reversing climate change, but it's also essential for the future of your business. As we analysed in our related article “Supply chain transparency: why’s key to ESG success”, Environmental, Social and Governance (ESG) in business is a heavyweight way that business leaders gain the trust of stakeholders, including investors, government regulators and customers.
Legislation like the UK Sustainability Disclosure Requirements (SDR) and the Corporate Sustainability Due Diligence Directive (CSDDD) already mandate some level of carbon footprint analysis, and these requirements are likely to become more stringent. Furthermore, consumers are increasingly aware of the environmental impact of the products they buy. Reducing supply chain emissions and increasing transparency will build consumer trust and brand loyalty, securing your business's future.
While businesses have mainly focused on sustainability to reduce emissions within their supply chains, there is a way to go further, not just sustaining our current state but regenerating where we have negatively hurt our environment. This can be particularly effective when looking at land and water use.
table of contents:
What is a Regenerative Supply Chain?
Understanding Emissions in Supply Chains (Specifically Scope 3)
Why Scope 3 Emissions are the Most Challenging for Businesses
Steps to Reduce Your Scope 3 Emissions and Embrace Regenerative Strategies
How to Find the Right Balance - Let Legislation Be Your Guide
What is a Regenerative Supply Chain?
Regenerative supply chains go beyond reducing harm, they aim to give back. A regenerative supply chain proactively contributes to the environment by restoring ecosystems, improving biodiversity, and revitalising systems.
When businesses aim for sustainability, the focus is on minimising negative impacts, such as reducing waste, conserving resources, choosing ‘greener’ materials and lowering emissions. So, sustainability aims for a net-neutral impact. In comparison, regenerative practices seek to leave a net-positive impact.
Consider carbon sequestration, or in other words, the way carbon is naturally absorbed and stored in vegetation, soil and sea, aka ‘carbon sinks’. A regenerative approach would be to look for opportunities in supply chains to help protect and restore environments where carbon sinks have been or are being lost.
Understanding Emissions in Supply Chains (Specifically Scope 3)
There are three categories of emissions established by the Greenhouse Gas (GHG) Protocol.Scope 1: these are direct emissions from sources owned or controlled by an organisation. They include emissions from fuel combustion in company-owned facilities or vehicles, as well as on-site energy generation.
Scope 2: emissions are indirect emissions from the generation of purchased electricity, steam, heating, or cooling consumed by an organisation.
Scope 3: emissions are indirect emissions from activities not owned or directly controlled by the organisation but related to its value chain. They encompass a broad range of emissions sources, such as those from suppliers, transportation, and product disposal. Scope 3 is often the largest source of emissions and can include business travel, waste generation, and purchased goods and services.
Scope 3 emissions are typically 80 to 90% of most businesses' carbon emissions. They are the largest share, often invisible and unknown and thus the hardest to tackle. This is why a focus on supply chain mapping and visibility is a powerful and effective approach to creating a sizeable impact on carbon footprint.
Why Scope 3 Emissions are the Most Challenging for Businesses
Unlike Scope 1 and Scope 2, which are contained within a company’s operations and energy consumption, Scope 3 emissions are distributed across an extended supply chain, involving multiple tiers of suppliers, distributors, and consumers. This means that companies often have limited visibility into or control over the emissions generated by their suppliers’ processes, the modes of transportation they use, or even how customers use and dispose of products. Tracking these emissions requires cooperation and data sharing across various stakeholders, who may have different levels of sustainability commitment, reporting practices, and technological capabilities.
In addition, quantifying Scope 3 emissions is complex because it involves multiple methods of data collection and often requires using industry averages or secondary data when supplier-specific information is unavailable. This can lead to inaccurate or inconsistent reporting, making it difficult for companies to get a clear picture of their environmental impact. Addressing Scope 3 emissions demands companies work closely with their suppliers and partners to gather accurate emissions data, support emissions reduction initiatives, and create alignment around shared sustainability goals.
Steps to Reduce Your Scope 3 Emissions and Embrace Regenerative Strategies
1. Gather primary data from supply chains.
Evidence shows that businesses which collect primary data from their supply chains have a greater reduction in CO₂ and CO₂e emissions. Increased accuracy in identifying and tracking carbon emissions allows organisations to take more targeted actions towards decarbonisation.
In order to collect primary data from their suppliers, businesses need high levels of supply chain visibility. Many brands don't have direct data from their tier 1 suppliers so rely on average industry data. Relying on secondary data like this can be inaccurate. McKinsey found that a transition from secondary to primary data in emissions tracking could reveal up to a 20% difference. Similarly, sustainability advisor, Jessica Cederberg Wodmar, reporting on carbon accounting studies, explains that studies from the textile industry indicate that companies shifting to primary data collection have observed emission reductions ranging from 20-45%. This is because suppliers using primary data can better identify and address high-impact areas like raw material sourcing, production, and transportation.
Gaining visibility of the supply chain is essential to start collecting the primary data to gain visibility of environmental impacts at each stage. This enables brands to better address high-impact areas like raw material sourcing, production and transportation. Supply chain mapping tools like Segura, can import verified carbon data, for example from The Higg Index, to build a carbon output report on an order/supplier basis.
Reiss is an example of a fashion retailer which is proactively measuring, monitoring and reporting primary data to help reduce greenhouse gas emissions. It is committed to achieving net zero carbon output by 2040 and publishes its emission data down to the fabric on its website.
2. Choose Suppliers that source from Regenerative Agriculture
Regenerative agriculture prioritises soil health, biodiversity, carbon sequestration and water conservation through practices like crop rotation, reduced tillage, composting, and agroforestry. These methods not only improve crop resilience but also enable soil to act as a natural carbon sink by sequestering CO₂ from the atmosphere.Additionally, regenerative agriculture strengthens rural economies and biodiversity by encouraging polyculture and habitat restoration, creating a more sustainable and circular approach to resource use.
Initiatives like CottonConnect are leading the way, promoting the adoption of regenerative agriculture within cotton value chains in India and beyond. Brands such as Viviene Westwood also exemplify how regenerative agriculture can be used. 12% of the cotton used by Viviene Westwood comes from farms with regenerative agriculture practices.
3. Choose suppliers that embrace green energy supply
Many textile manufacturers are investing in renewable energy sources to reduce their carbon footprint. For example, installing wind turbines and solar panels on buildings to ensure their own green energy supply.
Businesses that map their multi-tier supply chain with Segura can request energy data from their suppliers as part of their engagement. Retailers can work with suppliers to run energy audits and look for ways to reduce energy use, which can be as simple as replacing old light bulbs with LEDs, and increasing recycling and optimising waste disposal.
Textile manufacturers can also use innovative methods to reduce consumption. For example in this video produced by Safia Minney founder of Fashion Declares, working alongside Middlesex University, Safia analyses opportunities for regenerative fashion overall, and highlights garment manufacturer Echotex in Bangladesh, which captures waste heat from gas dryers and feeds it back into their drying machines. [Go to 13:41].
4. Choose local suppliers
Local sourcing minimises transportation distances, which directly reduces emissions from logistics, particularly from air and long-haul trucking. By working with suppliers within the same geographic area, companies can reduce their carbon footprint while also mitigating the environmental impacts associated with fuel consumption and packaging waste in transit.Building partnerships with local suppliers also strengthens community relationships and supports local economies, which can be integral to long-term regenerative development.
In their Kind Society Initiative report, River Island details an example of local sourcing by relocating the production of their carrier bags from Malaysia to the UK, effectively reducing carbon emissions in their supply chain.
5. Circular Economy and Closed-Loop Systems
Circular economy and closed-loop, zero-discharge systems minimise waste and emissions by rethinking how resources are used, reused, and recycled. Circular systems keep materials in continuous use, which significantly reduces the need for raw materials.
This approach lowers emissions by cutting down on the energy-intensive processes associated with extracting and manufacturing natural resources. In our article, Why Supply Chain Sustainability will be the Innovative Force in Fashion, we give some great examples of how to innovate with circular design and reduce carbon footprint with fully recyclable clothing.
Many big fashion brands demonstrate excellent examples of circular practices. For example, Adidas designs shoes that can be remade and aims to use biodegradable materials that will disintegrate naturally. Footwear retailer, Schuh, is leading the way with innovative commitments to recycling and upcycling. Schuh’s Sell Your Soles scheme gives a £5 voucher to any customer who returns end-of-life footwear to any of their 122 stores, regardless of where they were purchased. They partner with Recyclatex who ensure that 98% of the returned footwear is reused. Funds contributed back to Schuh are donated to World Land Trust, and between 2019 and 2023 Schuh's donations have facilitated the planting of over 23,000 trees via the World Land Trust.
Other examples are H&M and John Lewis, which have in-store garment collection programmes. Similarly, River Island works with Reskinned, which offers an online ‘takeback’ service, where you can send three unwanted garments to receive a £5 River Island voucher. Clothing, handbags and shoes are then handled for reselling, recycling or repurposing.
6. Sustainable Transportation
Sustainable transportation and logistics reduce supply chain emissions when there is a focus on energy-efficient practices and low-emission alternatives.
One approach is transitioning to renewable energy sources, such as solar and wind, to power transportation infrastructure and electric vehicle (EV) fleets. Optimising logistics routes also helps reduce emissions by minimising fuel use and reducing travel distances.
Changing the method of transportation can also reduce carbon emissions. Veja is an example of one brand that does this, aiming to transport products by sea freight rather than plane. In 2020 only 7% of VEJA’s transportation was done by aeroplane.
7. Digital Solutions & Partnerships
Digital solutions are transforming the way companies track and measure the impact of regenerative practices and emissions reductions across supply chains.
IoT (Internet of Things) devices, such as soil sensors and weather-monitoring systems, enable companies to gather precise, on-the-ground data about environmental conditions and resource use, such as soil health, moisture levels, and CO₂ capture. By leveraging this data, companies can assess the effectiveness of regenerative practices and identify areas for improvement.
For retailers, technical data and auditing partners can help verify that suppliers are implementing regenerative practices, such as soil enrichment or water conservation, and provide real-time data for stakeholders.
How to Find the Right Balance - Let Legislation Be Your Guide
Any ESG team wishing to improve their business’s carbon footprint will inevitably encounter much resistance, whether that be from internal teams, fighting for their priorities and budgets, or from suppliers who have many orders to fulfil and customers to satisfy.
Therefore, it is imperative to have a clear plan of which strategies you’re going to target and when. You cannot do all of these things at once. And also sometimes your goals might conflict, so you have to balance where to put your resources.
The Segura approach is to use new and upcoming legislation as your propeller. Use our matrix to find the legislation you’re most concerned about, and the data points that you need to capture. You’ll notice data points that are common to multiple regulations, so this will help you maximise results with the least effort.
How Can Segura Help?
Segura also offers a powerful supply chain mapping solution for capturing carbon emission data, by providing unparalleled visibility into your supply chain.
Segura’s supply chain mapping solution empowers you to gather primary data and comprehensively map and assess your suppliers' direct and indirect carbon emissions across your entire multi-tier supply chain. This enables you to take meaningful steps toward regenerative solutions to reduce scope 3 emissions and optimise regenerative solutions along the value chain.
