Supply chain analysis for the CO2 Performance Ladder with an example
A supply chain analysis is a calculation of the CO2 emissions in one chain that your organisation is part of, along with the reduction opportunities you can use there together with chain partners. For the CO2 Performance Ladder, the supply chain analysis is mandatory from level 4 (handbook 3.1). In handbook 4.0 it is called value chain analysis and belongs to tiers 2 and 3. The analysis covers scope 3 emissions and follows the method of the GHG Protocol . Below you can read how to choose a topic and see a worked example, based on the Practical Guide from SKAO (the Dutch foundation that manages the CO2 Performance Ladder) .
Short answer: under handbook 3.1, you make two supply chain analyses for level 4: one on an emission from the top 2 and one from the top 6 of your ranking of the most material scope 3 emissions. Small organisations make one, from the top 2. Under handbook 4.0, the number depends on your main activities, which together cover 50% of your total emissions.
On this page
Level 4 and tier 2 side by side.
Requirements 3.1 and 4.0Rank emissions by size and influence.
Choosing the topicSupply chain analysis of concrete paving.
Worked exampleEvidence for the ladder audit.
What the auditor wants to seeWhat does the CO2 Performance Ladder require for the supply chain analysis?
The requirements differ per handbook. During the transition period, both versions exist side by side. See levels and tiers. New audits under 3.1 are possible until 14 January 2027. Under handbook 3.1, the supply chain analysis belongs to level 4, with two analyses and a reduction target for the chain. See CO2 Performance Ladder level 4 for the requirements in detail.
| Item | Handbook 3.1 (level 4, requirement 4.A.1) | Handbook 4.0 (tiers 2 and 3) |
|---|---|---|
| Name | Supply chain analysis | Value chain analysis |
| Basis for the choice | Ranking of the most material scope 3 emissions (PMC analysis) | Breakdown into activities across scope 1, 2 and 3 |
| Number | 2 analyses: one from the top 2, one from the top 6. Small organisations: 1 from the top 2 | As many as needed to cover the main activities (50% of total emissions) |
| External review | A knowledge institute supports or comments on at least 1 analysis (requirement 4.A.3). Mandatory for small organisations | Professional commentary no longer mandatory |
| Time horizon | Short-term reduction opportunities | Medium-term as well, and long-term at tier 3 |
| Follow-up | Scope 3 target per supply chain analysis (4.B.1) | Targets in the climate transition plan |
Sources: Practical Guide part 2 and the change list 4.0 versus 3.1 from SKAO . Under 3.1, whether you are small, medium or large depends on your scope 1 and 2 emissions. Under 4.0, you look at FTEs, turnover and balance sheet total, just as with the CSRD (Corporate Sustainability Reporting Directive).
Choosing the topic: the ranking of most material emissions
Before you make a supply chain analysis, decide which scope 3 emissions matter most. Material here means: large and influenceable. The Practical Guide gives six steps.
- Make a list of your activities, for example roads, bridges and sewerage.
- Identify the relevant scope 3 categories per activity, such as purchased materials or transport by third parties.
- Estimate the size of each emission: large, medium, small or negligible.
- Estimate your influence: what can measures achieve? Use the same scale.
- Determine your market share or turnover per activity. The larger it is, the more influence you have.
- Rank the emissions based on steps 3, 4 and 5.
Example ranking for a civil engineering (GWW) company
GWW stands for grond-, weg- en waterbouw (civil engineering: earthworks, roads and hydraulic works).
| Rank | Emission | Size | Influence | Explanation |
|---|---|---|---|---|
| 1 | Purchase of concrete paving | Large | Medium | Large volumes, lower-cement alternatives available |
| 2 | Purchased earthmoving | Large | Medium | Subcontractors with their own equipment |
| 3 | Purchase of raw materials (sand, gravel) | Medium | Medium | Transport distance plays a role |
| 4 | Use of roads | Large | Small | Traffic itself is hardly influenceable |
| 5 | Construction waste processing | Medium | Medium | Reuse possible |
| 6 | Transport of purchased materials | Medium | Small | Depends on the supplier |
This company chooses concrete paving (top 2) and waste processing (top 6) for its two supply chain analyses. The example emissions come from the SKAO Practical Guide. The assessment itself is fictional.
Do not choose the topic that is easiest to calculate. The auditor checks whether your choice follows logically from your ranking. A supply chain analysis on office paper for a road builder fails immediately.
Example supply chain analysis: concrete paving
A supply chain analysis follows a fixed structure. Below are the main points of a fictional analysis. The figures are illustrative. In a real analysis, you use supplier data, the Dutch National Environmental Database (Nationale Milieudatabase) or life cycle assessments (LCAs).
1. Define the boundaries
| Item | Content |
|---|---|
| Chain | Concrete paving blocks and slabs, from cement production to demolition |
| Functional unit | 1,000 m² of paving laid per year |
| Volume | 40,000 m² per year |
| Chain partners | Cement producer, concrete products factory, transporter, own construction team, processor |
2. Supply chain steps and emissions
| Supply chain step | Who | Emissions per 1,000 m² (tonnes CO2e) | Share |
|---|---|---|---|
| Production of cement | Cement producer | 14.0 | 70% |
| Production of paving blocks | Concrete products factory | 2.4 | 12% |
| Transport to project | Transporter | 1.6 | 8% |
| Laying | Own construction team (scope 1) | 1.2 | 6% |
| Demolition and processing | Processor | 0.8 | 4% |
| Total | 20.0 | 100% |
At 40,000 m² per year, that is 800 tonnes CO2e in this example. Well over two thirds comes from cement production.
3. Reduction opportunities
| Measure | Chain partner | Estimated effect | Feasibility |
|---|---|---|---|
| Paving blocks with less cement or alternative binders | Concrete products factory | -25% on production | Medium, the supplier has the product |
| Reuse of existing blocks during redevelopment | Own projects | -30% on the reused part | High, requires agreements with the client |
| Transport with electric trucks | Transporter | -60% on transport | Low to medium |
4. Target and follow-up
Based on the analysis, the company sets a scope 3 target: “By 2028, CO2 emissions per 1,000 m² of paving laid are 20% lower than in 2025, through purchasing low-cement blocks and reuse.” Progress is recorded in the progress report, and the company starts talks with two suppliers.
What does the auditor want to see in the supply chain analysis?
| What the auditor checks | Evidence |
|---|---|
| Is the choice substantiated? | Ranking or activity analysis with size and influence |
| Is the chain fully described? | Supply chain steps, partners and boundaries |
| Are the figures traceable? | Sources, emission factors, assumptions, calculation |
| Have reduction opportunities been identified? | Measures with effect and chain partner |
| Does it lead to a target? | Scope 3 target and progress |
| Under 3.1: is there an external review? | Commentary or support from a knowledge institute |
| Is it published? | Analysis and ranking on the website or the SKAO platform |
Common mistakes in the supply chain analysis
- Calculating only, no opportunities. The analysis is meant to find reductions. Without measures and a target, it is not finished.
- No chain partners involved. The best data and the biggest reductions come from suppliers.
- Never updated. Under 4.0, you review at least once every three years whether the analysis needs updating.
Next step
See what level 5 adds on top of the supply chain analysis, or start at the basics with scope 1, 2 and 3. Want to know how the supply chain analysis fits into your evidence file? See the audit checklist. In ISO 14001, the same thinking is called the life cycle perspective.