Value Chain Traceability

The value chain traceability is the ability to track and document every stage of a product or service's lifecycle, from the extraction of raw materials through to its final use and end-of-life management. It makes it possible to know where each component comes from, what processes it has gone through and what impacts it has generated, and has become an essential tool for measuring the carbon footprint and meeting sustainability regulations.

What does value chain traceability cover?

It involves identifying and recording all the processes, actors and resources involved in the value chain of a product:

• Origin of raw materials: geographical location, extraction methods and transport.
• Processing and manufacturing: techniques used, energy consumption and waste generation.
• Transport and logistics: modes of transport, distances and efficiency.
• Use and consumption: environmental impact during the product's use phase and useful life.
• End of life: waste management and possibilities for recycling or reuse.

Why it is key to the carbon footprint

Traceability is the foundation for measuring and managing the carbon footprint, especially Scope 3 emissions, which occur outside the company's facilities (in suppliers, transport and product use) and typically represent the largest share of the total footprint. Knowing each stage makes it possible to:

• Identify critical emission points: determine which processes generate the most greenhouse gases (GHGs).
• Apply targeted reduction measures: focus efforts where they have the greatest impact on reducing emissions.
• Assess the effect of improvements: track the evolution of emissions and verify the effectiveness of measures.
• Feed into lifecycle assessment: traced data is the raw material for a rigorous lifecycle assessment (LCA).

Traceability and sustainability regulation

Regulatory pressure has made traceability a necessity. The Corporate Sustainability Due Diligence Directive (CSDDD) and ESG due diligence requirements oblige large companies to identify and mitigate impacts throughout their value chain — something impossible without traceability. Furthermore, the forthcoming European Union Digital Product Passport (DPP) will require the recording and sharing of information on the origin, composition and repairability of many products.

Tools and technologies

• Supply chain management (SCM) software: tracks the flow of materials and information.
• Identification and tracking technologies: barcodes, RFID, GPS and blockchain enable individual tracking of products and materials.
• Data analytics platforms: collect, process and visualise carbon footprint and sustainability data.

Challenges and opportunities

Implementing traceability systems presents challenges: the complexity of global supply chains, implementation costs (especially for SMEs) and the lack of standardisation in data exchange. At the same time, growing environmental awareness and regulation are driving more accessible solutions, collaboration among actors in the sustainable supply chain and new business models based on sustainability in product development.

At Manglai we help companies trace their value chain and measure their carbon footprint, including Scope 3 emissions, so they can reduce their impact and comply with regulations. Discover how Manglai can help you.