By Vincent Perriard, Associate, Certification Programs
For companies committed to meaningful climate action, reducing Scope 3 emissions is currently one of the most urgent and complex challenges. Scope 3 emissions include the upstream and downstream indirect emissions throughout a company’s value chain and can account for 70 to 90 percent of an organization’s total greenhouse gas (GHG) footprint.[1]Carbon Trust. (n.d.). What are Scope 3 emissions and why do they matter? … Continue reading Addressing Scope 3 emissions is essential to meeting climate targets and advancing global decarbonization.
A significant opportunity to decrease global carbon emissions lies in enabling suppliers to transition to clean electricity. By supporting clean energy procurement across supply chains, companies can drive meaningful change that benefits both the environment and business resilience.
The Role of Supplier Clean Electricity in Emissions Reduction
Although electricity use is considered Scope 2 emissions for suppliers, it is categorized as Scope 3 in the purchasing company’s reporting.[2]Yale Sustainability. (2023, November 14). Yale experts explain Scope 3 emissions. … Continue reading Supporting suppliers in their transition to renewable energy is therefore one of the most direct and impactful strategies available for Scope 3 emissions reductions. One major challenge is communicating the urgency of the clean transition to suppliers, who may have different expectations of target-setting than the managing organization.
Stakeholder expectations around this approach are growing rapidly. Frameworks such as the Science Based Targets initiative (SBTi) and CDP emphasize supplier engagement as a critical element of credible climate targets.[3]Science Based Targets Initiative. (2023, June 19). New supplier engagement guidance: Unlocking the power of supply chains for decarbonization. … Continue reading Investors, customers, and regulators are increasingly focused on the integrity of value chain emissions reductions, making supplier clean electricity procurement not only an environmental priority, but also a business imperative.
Current Challenges in Supplier Clean Electricity Procurement
Despite the critical need for Scope 3 decarbonization, companies still face significant challenges in enabling their suppliers to adopt clean electricity. Suppliers may lack access to affordable financing for renewable energy projects or be unfamiliar with procurement options like power purchase agreements (PPAs) or renewable energy certificates (RECs).[4]DLL Group. (2025, April 16). Energy finance barriers and how to overcome them. https://www.dllgroup.com/en/blogs/blogsoverview/energy-finance-barriers-and-how-to-overcome-them Sometimes, local policy and regulatory barriers can further restrict available options, particularly in markets with limited physical renewable energy infrastructure.
Small suppliers may also struggle with fragmented or insufficient demand that makes realistic renewable energy procurement difficult. Unreliable data collection adds another layer of complexity. Without reliable information about supplier electricity use and emissions, companies may find it challenging to set meaningful targets or track their progress.[5]Carbon Direct. (2025, April 3). Carbon footprint data collection: Common challenges and how to solve them. … Continue reading
Industry Examples: Progress and Limitations
The shift towards clean electricity procurement is becoming increasingly vital as companies recognize the importance of sustainability in their operations and supply chains. As organizations set ambitious goals to reduce carbon emissions, they are also encouraging their suppliers to adopt renewable energy. Notable examples from leading companies illustrate the progress being made in clean energy initiatives, while also highlighting the challenges that many suppliers face in this transition. These cases demonstrate both the advancements in sustainability efforts and the limitations that still hinder widespread adoption of clean energy solutions.
Apple, for example, has committed to reaching carbon neutrality across its entire supply chain by 2030, with supplier clean electricity procurement as a core strategy.[6]Apple Inc. (2022). Supplier Clean Energy Program Update. Apple. https://www.apple.com/environment/pdf/Apple_Supplier_Clean_Energy_Program_Update_2022.pdf Over 300 suppliers are now dedicated to using 100% renewable energy for Apple production, enabled by years of investment in supplier education and support. Apple also publishes annual updates on supplier energy use and progress toward its clean electricity goals, providing the transparency and accountability that has helped push the industry forward.
Walmart’s Project Gigaton takes a different approach, by engaging thousands of suppliers to collectively avoid one billion metric tons of GHG emissions by 2030.[7]Walmart Inc. (n.d.). Project Gigaton. Walmart Sustainability Hub. https://www.walmartsustainabilityhub.com/project-gigaton The initiative provides resources like emissions-calculation tools and renewable procurement guidance. However, progress varies by region and industry, with some suppliers facing resource constraints or challenges in accessing renewable energy.
In the pharmaceutical sector, several major firms are engaging suppliers around their energy use and climate performance targets.[8]Reuters. (2024, February 14). Big Pharma pulls together to shrink healthcare’s outsized carbon footprint. Reuters. … Continue reading However, this industry faces unique operational and regulatory challenges. Pharmaceutical manufacturing often requires reliable power and controlled environments, which can make the direct integration of on-site renewables a complex undertaking. Overcoming these hurdles can demand additional investment in technologies like energy storage and advanced grid management, which could become a prohibitive barrier for some companies. Additionally, global supply chains in this sector span areas where access to credible renewable energy products may be limited. Companies such as AstraZeneca[9]AstraZeneca. (n.d.). Climate change. https://www.astrazeneca.com/sustainability/climate-change.html and Johnson & Johnson[10]Johnson & Johnson. (n.d.). Our environmental sustainability approach. https://www.jnj.com/en-uk/our-environmental-sustainability-approach have made public commitments to reduce supply chain emissions and are working with suppliers on renewable energy initiatives. Nonetheless, widespread adoption of clean electricity procurement across the pharmaceutical supply chain remains a longer-term goal that will likely require more targeted support and market transformation. This could include expanding access to more reliable renewable energy sources to ensure dependability, as well as financial incentives, technical assistance, and policy reforms that lower barriers for suppliers in challenging markets.
These examples highlight both the promise and limitations of current supplier clean electricity efforts. While significant strides have been made, barriers persist, particularly for small and mid-sized suppliers. Addressing these challenges requires a standardized framework to create effective and adaptable procurement programs that can drive broader market transformation.
CRS Supplier Clean Electricity Procurement Guidance
Center for Resource Solutions (CRS) developed the Guidance for Supplier Clean Electricity Procurement[11]Center for Resource Solutions. (2023, August 11). Guidance for Supplier Clean Electricity Procurement. https://resource-solutions.org/document/08112301/ as a practical framework to help companies design and implement effective supplier programs in the face of practical barriers that often hinder supplier transitions to clean energy. It emphasizes the importance of accurate data collection and emissions measurement as a foundation for setting credible Scope 3 targets. By promoting direct engagement with suppliers, it supports more transparent and rigorous emissions accounting.
The guidance provides a structured approach that enables companies to move beyond high-level commitments to build credible and impactful supplier clean electricity procurement initiatives. It is based on a six-stage framework that addresses the complete program lifecycle:
- Stage 1 focuses on the measurement of supplier electricity use. Companies are encouraged to collect primary, facility-specific data, when possible, while recognizing that data collection may require collaboration with suppliers to address confidentiality and accuracy concerns.
- Stage 2 addresses measurement of GHG emissions associated with suppliers’ purchased electricity. This involves applying reliable emissions factor data and establishing a reliable baseline to inform program design and target-setting.
- Stage 3 involves procurement and transactions analysis. Companies are guided on how to analyze local electricity markets, procurement options, regulatory frameworks, and tracking systems to identify credible approaches for suppliers based on their respective regions. It also provides tools to navigate the complexities of electricity markets, helping companies identify procurement strategies that align with local regulations, costs, and supplier capabilities. Whether through RECs, on-site generation, or direct purchases, the guidance encourages flexible, region-specific approaches to tailored supplier readiness and market maturity.
- Stage 4 supports supplier clean electricity procurement goal setting. This stage helps companies define the scope, objectives, targets, and outcomes of their programs. It encourages companies to tailor goals to specific markets and supplier types, balancing ambitious targets with practical considerations such as cost, market maturity, and the capability of the supplier. To ensure accountability and progress, the guidance outlines program design options such as recognition tiers, incentives, and standardized verification methods. This comprehensive and adaptive framework empowers companies to build effective supplier engagement programs that drive real emissions reductions and support the global energy transition.
- Stage 5 focuses on launching the supplier clean electricity programs. This includes supplier education, training, and early-stage procurement initiatives. Companies often begin with pilot projects or provide resources and strategies to suppliers, so they can slowly work up to developing the capacity to engage in larger scale procurement efforts.
- Stage 6 supports full program implementation. This involves setting clear procurement requirements and criteria, and enabling supplier reporting and verification. It also includes establishing mechanisms for accountability, such as recognition tiers or incentives.
The guidance goes beyond simply identifying best practices and instead offers standardized procurement criteria and specific verification metrics. These criteria are designed to address areas of accountability, new clean electricity development, technology and business innovation, community benefits, and economic and energy security. The guidance balances rigor with flexibility, standardizing these potential outcomes while also allowing companies to tailor them to specific markets and supplier contexts.
The guidance also includes a checklist with detailed considerations for adapting program goals and criteria to differing regional and market conditions. This ensures that companies can design programs that are both effective and feasible.
Call to Action
Reducing Scope 3 emissions will be a critical factor in meeting all levels of decarbonization goals. Working with suppliers to procure clean electricity will be one of the most direct, highest-impact strategies available to companies seeking to address these emissions in a credible and scalable way.
To support this transition, CRS offers expert assistance within its Advisory Services[12]Center for Resource Solutions. (n.d.). Services. https://resource-solutions.org/services/ and Clean Energy Accounting Project (CEAP)[13]Center for Resource Solutions. (n.d.). Clean Energy Accounting Project (CEAP). https://resource-solutions.org/programs/ceap/ teams, providing tailored solutions that address the unique challenges each company faces. Achieving meaningful progress will require companies to move from broad commitments to specific, actionable strategies that account for the complexities of diverse markets and supplier differences. By leveraging this expertise, organizations can effectively navigate the complexities of clean energy procurement and supplier engagement.
CRS’s Guidance for Supplier Clean Electricity Procurement offers companies a practical, structured framework to support this transition. By adopting and applying the guidance, companies can build robust supplier engagement programs that overcome practical barriers, encourage supplier action, and deliver measurable climate benefits.
We invite companies to explore this guidance as they strengthen their climate strategies and work with suppliers to build cleaner, more resilient, and more sustainable global supply chains.
About the Author
Vincent Perriard, Associate, Certification Programs
Vincent is currently working as an Associate, Certification Programs at CRS while pursuing his Master of Science in Energy Systems Management at the University of San Francisco. He holds a Bachelor of Science in Economics from the University of Wisconsin-Madison. Vincent is channeling his academic and professional experience toward a career in the clean energy sector and energy markets.
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