“The Scope 3 journey is no longer about incremental improvement; it is about redefining how chemical supply chains are designed and operated. What we are really witnessing is a shift from isolated sustainability initiatives to a far more integrated ecosystem mindset, where procurement, manufacturing, logistics, and customers are all part of one connected carbon system,” highlights Dhiraj Asthana, President – Commercial, Atul Ltd., during this interview…
As Scope 3 emissions become a strategic priority for the chemical industry, what practical and scalable interventions are helping organizations decarbonize their extended value chains beyond manufacturing operations?
If we look at Scope 3 honestly, the first mistake many industries make is trying to treat it like an internal sustainability extension. It is not. It sits outside the boundary of direct control, so the only way to influence it is through system redesign and partner alignment. At Atul, the starting point has been procurement discipline—moving toward structured frameworks like responsible sourcing and embedding ESG expectations into supplier evaluation. But what really matters is not the framework itself, it is the behavior it drives.
We are increasingly focusing on supplier engagement beyond compliance—helping suppliers identify efficiency opportunities in energy use, material handling, and logistics. Even small process improvements at supplier end compound significantly when viewed across the value chain.
Globally, Scope 3 typically contributes 70–90% of total emissions (GHG Protocol / McKinsey estimates), which makes it clear that internal decarbonization alone has limited impact. What is becoming practical at scale is:
- Supplier collaboration on efficiency improvement
- Localization of sourcing where feasible
- Logistics optimization through route and load efficiency
- Standardization of emissions measurement approaches
The shift is subtle but important—from reporting emissions to influencing emissions behavior across partners.
The chemical sector depends on highly interconnected ecosystems involving feedstocks, energy providers, logistics networks, contract manufacturers, and downstream industries. Which parts of this ecosystem currently present the greatest decarbonization challenge, and how can the industry address them collaboratively?
In my experience, the most difficult part is not one segment—it is the interfaces between segments. Feedstocks, logistics, contract manufacturing, packaging—each has its own optimization logic. But emissions do not respect these boundaries. Logistics is one of the most visible pressure points. Globally, it contributes around 10–12% of CO? emissions (IEA / World Bank estimates), and in chemicals it becomes even more critical because of bulk movement and long supply chains.
We also cannot ignore energy. Any volatility in crude or fuel prices immediately cascades into freight, manufacturing, and raw material costs. With nearly 20% of global oil and LNG passing through the Strait of Hormuz, geopolitical disruptions quickly become supply chain disruptions. At Atul, we are seeing that collaboration is no longer optional. It is the only way forward. But collaboration here does not mean meetings—it means shared visibility and shared accountability.
Industry-wide decarbonization will require:
- Common emissions accounting standards
- Shared logistics optimization initiatives
- Supplier capability building
- Joint investments in cleaner energy and transport modes
The biggest challenge is not intent. It is alignment across fragmented ecosystems.
With global customers and export markets increasingly demanding sustainable sourcing and low-carbon products, how is Scope 3 performance influencing procurement decisions, customer relationships, and long-term competitiveness for chemical companies?
This is where the shift is becoming very visible. Earlier procurement was driven almost entirely by cost, quality, and delivery. Today, especially in export-linked markets, sustainability is becoming a parallel decision filter. We are increasingly seeing customers ask not only for product specifications but also for the carbon intensity of the value chain behind it. That changes the procurement equation completely.
At Atul, responsible procurement frameworks and ESG-aligned supplier evaluation processes are helping us respond to this shift. But more importantly, it is changing conversations with suppliers—moving from transactional sourcing to long-term alignment. Globally, studies indicate that over 70% of large enterprises now include ESG criteria in procurement decisions, which shows how quickly this is becoming mainstream. The implication is clear: Scope 3 performance is no longer a back-end sustainability metric. It is becoming a market access and competitiveness factor.
Digital technologies such as AI, predictive analytics, digital twins, and carbon intelligence platforms are transforming industrial supply chains. How are these technologies helping chemical companies improve emissions visibility, operational efficiency, and sustainability decision-making?
Technology is definitely enabling the conversation on Scope 3, but I would not say it is the solution by itself. What it really enables is visibility at scale and faster decision-making loops. At Atul, digital systems across procurement and logistics are helping us connect data points that were earlier fragmented—supplier performance, logistics efficiency, procurement patterns, and operational planning. But the real shift is not dashboards. It is decision behavior.
Globally, companies leveraging advanced analytics in supply chains have seen 20–30% improvements in operational efficiency (McKinsey estimates). The same logic applies to emissions—if you cannot measure it in near real time, you cannot manage it effectively. Carbon intelligence platforms, AI-driven planning tools, and predictive analytics are beginning to shift organizations from retrospective reporting to proactive decision optimization. We are still early in this journey, but directionally, it is very clear that decision intelligence will define the next phase of Scope 3 management.
Circular economy models, green chemistry innovations, bio-based feedstocks, waste-to-value initiatives, and sustainable packaging are gaining momentum. Which emerging innovations or ecosystem partnerships do you believe can create the biggest long-term impact on indirect emissions reduction?
If I step back, the most meaningful change I see is that sustainability is slowly becoming a design principle, not an afterthought. Circularity, waste recovery, and material efficiency are no longer ‘innovation projects’—they are becoming structural elements of supply chain design. At Atul, we are increasingly focusing on efficiency across multiple dimensions—not just cost efficiency but also material and energy efficiency. That shift is subtle but powerful because it changes decision-making at every level. Globally, circular economy systems are estimated to unlock ~USD 4.5 trillion in value (World Economic Forum estimates). But the more important part is not the economic value, it is the systemic redesign it forces.
What will likely have the biggest impact going forward is not one breakthrough technology, but ecosystem-level integration:
- Waste-to-value systems
- Bio-based material substitution
- Cross-industry material loops
- Collaborative packaging and logistics redesign
The chemical industry will not decarbonize through isolated innovations. It will happen through interconnected ecosystem redesigns, where every participant influences the other. And that, in many ways, is the real future of Scope 3.
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