What is preventing corporate net-zero emissions from working for manufacturers?
It is the approach!
The problem with current approaches is that the lack of strategic thinking and it is preventing the manufacturing sector from leading in delivering the proper work in Environmental, Social, and Governance (ESG). Fear of time and resource constraints to develop a tailored sustainability plan, coupled with limited knowledge on the issue, is causing manufacturers to postpone the net-zero calibration, which could be a game-changer for future activities.
Why current approaches fail
When a product includes requirements that are outside a company’s core expertise—such as environmental impact assessment—specialized support is often necessary. A common mistake is assuming that all companies face the same ESG challenges. ESG priorities vary significantly depending on the business model, products, supply chain, and market.
As a result, manufacturers frequently invest time and money in generic ESG programs without a goal and a base year to compare results. This fails to deliver meaningful outcomes for investors and customers, and for the company, per se.
What this article will cover
In this article, we are going to investigate the most effective technical solution and how to incorporate it into the daily activities, keeping them under permanent control. It includes what specific tooling, advisory services, alternative energy, and approach are most effective to organize the ESG on the correct shelves.
Where should manufacturers start the Net-zero calibration?
Manufacturers should start with the E (Environment). It is often the most complex part of ESG, but working on the E also gives a broad view of the S and G. The E is guided by the Greenhouse Gas Protocol and the Corporate Sustainability Reporting Directive (CSRD), so relevant information and guidance are already available. Manufacturers can also rely on Software as a Service (SaaS), often already built into risk management tools with ESG features. The key is to choose a SaaS solution that fits the business activity.
This is why the E matters for manufacturers in Net-Zero calibration)
For most manufacturers, the environmental pillar is highly relevant because it spans the full product life cycle and focuses on the areas that drive impact most directly:
- energy use
- fuel consumption
- production residues and waste
Managing these areas is central to improving environmental performance and advancing net-zero goals.
The E is divided into 3 scopes that set boundaries to all corporate net-zero plans:
- Scope 1 is related to all fuel owned or controlled by the manufacturer in the activities.
- Scope 2 is related to all electricity owned or controlled by the manufacturer
Addressing Scope 1 and Scope 2 emissions should be the first priority. These scopes typically offer the clearest opportunities to reduce internal costs and cut greenhouse gas emissions. Many manufacturers have already made progress by installing photovoltaic panels and upgrading their vehicle fleets. This provides a practical starting point and can address roughly 30% of a company’s emissions, building momentum for broader decarbonisation efforts and helping establish a credible net-zero pathway.
Scope 3 is challenging but brings the reward of covering approximately 70% of the emissions.
- Scope 3 is usually the final stage companies address because it covers environmental impacts across the value chain, including those generated by upstream suppliers and downstream users of the finished product.
A practical starting point for Scope 3 is to identify your company’s position in the chain: supplier, manufacturer, or end user. This helps determine how much influence you have over Scope 3 emissions and where to focus first.
- You manage both the supply chain and the value chain if your product is sold as a final product on the market.
- You are part of the supply chain if your product or service is a component of a final product.
If your company fits the first category, the challenge is greater. You need to reduce the downstream impact of how your product is used and disposed of, while also working with upstream suppliers to lower the impact of the parts and materials they provide. Together, these upstream and downstream effects make up your Scope 3 footprint.
If you recognize your company as “a”.
For “a” corporation, the best place to begin is internally, by measuring the impact of your product’s life cycle. Scope 3 downstream categories run from 9 to 15, but for many manufacturers, the most relevant starting points are:
- Cat 9: Downstream Transportation & Distribution: the transport of sold products to customers. Depending on the business model, this may be one of the most significant sources of Scope 3 emissions.
- Cat 12: End-of-Life Treatment of Sold Products: disposal, treatment, or recycling of products after use.
Starting with these two categories helps you understand your product’s downstream impact and prepares you to assess what comes from your supply chain and becomes embedded in the final product. I recommend following the GHG Protocol principle of relevance rather than trying to cover all upstream categories 1 to 8 at once. To assess the footprint upstream, most manufacturers begin with:
Cat 1: Purchased Goods & Services: emissions linked to the production of procured goods and materials.
Cat 4: Upstream Transportation & Distribution: emissions from third-party logistics, freight, and warehousing.
If your product is physical, or forms part of a physical product, start your Scope 3 work in a way that reflects your own business reality and priorities. Focus first on the most relevant categories. As you build your inventory, you will identify other categories that may matter, but those can be addressed later. Trying to cover everything from the outset is likely to create unnecessary complexity and overwhelm the process.
If you recognize your company as “b”.
Apply the same approach to Scopes 1 and 2, then align your Scope 3 work with your client’s requirements. In many cases, your downstream categories are upstream categories for your client, which means they will need reliable data from you.
If you serve multiple clients, build a decarbonisation plan around the categories most likely to matter across accounts: Categories 1 and 4 upstream, and Category 9 downstream. Use this as your base plan, then adapt it to each client’s specific needs. Where clients require compliance support, they may also provide useful resources, such as SaaS reporting channels or training on the issues that matter most to them.
In summary
The fastest way to strategize your net-zero calibration is as follows:
- Set a year base and a goal (Feasible and Aligned to the EU goals)
- Focus on E(Environment) of your ESG and meet the S and G on the way.
- Prepare your SaaS tools and advisory services that understand your goal. If you decide to delegate parts of this work to internal personnel, contract training services, otherwise, you will end up with a marketing collaborator dealing with your Environmental impacts and creating a marketing report disguised as a sustainability report.
- Clear the easiest, starting with the scopes 1 and 2.
- Go for the 3 and create a plan to work first on the “Most Relevant” categories only, and in the next few years, improve until you get close to your goal.
- Focus on categories 4 and 9 if your product needs to be transported; if treated, categories 4 and 9 will present a sink on your emissions
Key takeaway: The net-zero plan has to be covered in cascade; principles such as relevance can prevent stress; reductions need to be measured using SaaS tools and advisory services. Categories 4 and 9 related to transport count with a solutions portfolio that can quickly lower the emissions in Scope 3 and provide faster Net Zero goals achievements. Share the resources you hire with your supply chain and cooperate to receive accurate data.
