Sustainable supply

Net Zero starts in the supply chain says Daniel Usifoh, MSc, MCIPS, Co-Founder of Axiom Sustainability Software

When FMs think about decarbonisation, the immediate focus is often on the buildings themselves. That means improving energy efficiency, investing in renewables or retrofitting for lower carbon performance. These initiatives are vital, but crucially, they only address part of the picture. The real challenge – and opportunity – lies in the supply chain.

The reason is quite simple: for most organisations, Scope 3 emissions account for 80 per cent or more of their total footprint. That’s a staggering figure, but Scope 3 encompasses a range of indirect emissions, including those from purchased goods and services, supply contracts, outsourced activities, waste management, commuting, business travel and the use and disposal of products.

For facilities managers who work in procurement, supplier relationships and building operations, Scope 3 is a paradox – they represent both the greatest complexity and the greatest opportunity to drive genuine progress towards Net Zero.

WHY SCOPE 3 MATTERS FOR FM

Facilities management is uniquely exposed to Scope 3 because the sector relies on extensive supply networks. Whether it’s cleaning, catering, HVAC maintenance, security, waste collection or construction projects, a large proportion of FM activities are outsourced. That means that virtually every business deal will involve Scope 3 emissions.

This creates a dual challenge. First, FMs must measure emissions across a fragmented and diverse supply chain. Second, they must influence and collaborate with suppliers, many of which are SMEs with limited capability, to reduce those emissions. With the introduction of new regulations, such as the EU Corporate Sustainability Reporting Directive (CSRD) and the UK’s Net Zero Strategy, as well as mandatory climate-related financial disclosures, the pressure for complete value-chain transparency is intensifying. For facilities managers, Scope 3 is no longer simply a “nice to have”. It is central to compliance, risk management and competitive advantage.

THE TECHNOLOGY THAT CAN HELP

The scale and complexity of Scope 3 have traditionally been a barrier. Collecting accurate emissions data from dozens or even hundreds of suppliers has often been patchy, inconsistent and resource-intensive. The good news is that digital tools are transforming what is possible, giving far more accurate reporting and allowing for carbon savings.

• Carbon accounting and ESG reporting platforms: These systems act as central hubs, integrating with procurement and finance systems to collect data directly from suppliers, standardise emissions factors and generate compliance-ready reports. For FMs managing multiple contracts, streamlining administration and improving accuracy are key.
• AI and machine learning: These technologies help analyse complex data sets to identify emission hotspots, forecast the impact of supplier or material changes and even suggest alternative procurement strategies with lower carbon intensity. For example, AI can model the carbon impact of switching from a traditional waste contractor to one offering circular economy solutions.
• Digital product passports and blockchain: These emerging tools provide transparency across entire product lifecycles. For facilities managers sourcing furniture, fixtures or equipment, digital passports enable a business to track its materials, embodied carbon and end-of-life options – all crucial data. Blockchain, meanwhile, ensures tamper-proof tracking of supplier credentials and carbon data.
• Automation in operations: Smart building technologies, IoT sensors and automated energy management systems contribute directly to Scope 1 and 2 reductions, while also supporting Scope 3 by reducing demand for outsourced energy and resource-intensive services. Predictive maintenance, for example, reduces equipment failures, extending asset life and reducing the carbon footprint of replacements.

Together, these technologies provide FMs with the tools to measure, monitor and actively mitigate Scope 3 impacts.

PRACTICAL STEPS FOR FMS

While technology is key, the transition begins with practical actions FMs can take today:

• Map your supply chain – Identify all outsourced services and suppliers contributing to your facilities portfolio. Categorise them by emissions impact.
• Engage with suppliers early – Begin conversations about emissions reporting, even if initial data is high-level. Collaboration is essential.
• Prioritise high-impact areas – Focus first on contracts with the largest carbon footprint, such as construction projects, energy-intensive services or high-volume consumables.
• Standardise measurement – Use recognised frameworks such as the Greenhouse Gas (GHG) Protocol to ensure consistent and comparable reporting across suppliers.
• Integrate reporting into contracts – Build sustainability requirements into tenders and KPIs so suppliers are incentivised to measure and reduce their emissions.
• Use digital tools – Pilot carbon accounting platforms or supplier engagement portals to streamline data collection and performance tracking.
• Communicate your progress – Transparency builds trust with stakeholders, tenants, and investors. Publish updates on supplier engagement and emissions reductions.

RISK, REGULATION AND REPUTATION

The risks of inaction are significant. FMs who fail to address Scope 3 may face:

• Regulatory risk – Non-compliance with reporting requirements such as CSRD or the UK’s climate disclosure rules.
• Contractual risk – Exclusion from tenders or frameworks where Net Zero credentials are mandatory. This includes UK public sector tenders over £5m, which need a carbon reduction plan in place.
• Reputational risk – Damage to stakeholder trust if sustainability claims lack evidence.

There are real opportunities for FMs who take the lead in managing Scope 3. Demonstrating robust supplier engagement and transparent carbon reporting strengthens relationships with clients and stakeholders, supports contract wins and enhances reputation. Operationally, efforts to cut emissions often deliver efficiency gains, such as reduced energy use, lower waste disposal costs and extended asset life.

COLLABORATION, COLLABORATION, COLLABORATION!

The path to Net Zero runs through the supply chain. While Scope 1 and 2 improvements remain essential, the real opportunity lies in tackling the indirect emissions embedded in outsourced services, supplier contracts and product lifecycles.

But, as you’ve read, tackling Scope 3 is not a challenge any one organisation can solve alone. Facilities managers must work closely with suppliers, industry and regulatory bodies, and clients to establish common standards, share data and pursue joint decarbonisation initiatives. Shared digital platforms that allow suppliers to provide data and access guidance on emissions reduction are becoming a cornerstone of effective FM sustainability strategies.

By embracing digital tools, setting clear supplier expectations, and integrating sustainability into every stage of the supply chain, FMs can turn Scope 3 from a regulatory burden into a strategic advantage.