Buy vs. Build: Scope 3 emissions calculators for freight forwarders
Emissions measurement in transport and logistics is receiving more attention than ever. Brands are looking to take control of the carbon footprints of their supply chains, while regulations already in effect are mandating businesses to report their scope 3 carbon emissions.
At the centre of this shift are freight forwarders tasked with measuring and mitigating the carbon footprint of their clients’ supply chain operations.
As a forwarder, you’re faced with a dilemma: How do you meet new client demand for emissions disclosure and also help them gain a better understanding of their supply chain carbon footprint?
In this blog post, we’ll help you decide whether you should build your own scope 3 emissions calculator in-house, or buy one from a third-party provider.
Considerations when choosing to buy or build a scope 3 emissions calculator
To help you decide which option is best for your business, we’ve identified 5 considerations you should take into account to ensure you’re covering all bases:
1. Cost - The financial implications of each solution, ensuring you gain a clear grasp of both short-term expenses and long-term value.
2. Internal resources - The availability and proficiency of internal technical resources needed to develop a custom solution or integrate a third-party solution.
3. Time to value - Understanding how development and integration will impact the time it takes for the solution to deliver value for your clients.
4. Accreditation - Providing a solution that meets industry standards and is third-party verified, providing credibility, driving client trust and meeting sustainability compliance standards.
5. Future-proofing - Ensuring you provide a solution enables your business to easily adapt to changing emissions regulations and client expectations to deliver long-term value.
For each consideration, we'll give you a brief overview of what to take into account for building or buying. Plus, we'll provide 3 important questions for each consideration that help you choose the right option for your forwarding business.
The financial implications of developing or integrating a scope 3 emissions calculator is one of the most significant concerns for forwarders — if you’re on a tight budget, it might even trump all other considerations.
The upfront costs involved in building a scope 3 emissions calculator in-house can be quite high — on the face of it, you’ll need to consider the research involved and the cost of employing developers to build, test and launch your solution.
But, there are also hidden costs to consider. The costs of access to emissions databases, access to fuel emissions factors and securing accreditation for your calculation methodology (more on that later) can all stack up.
You’ll also need to ensure you have ongoing developer resources dedicated to fixing bugs, evolving the calculator in line with changing standards and continuing access to emissions databases.
Depending on the provider, the price of signing up with an off-the-shelf emissions calculator can range from moderate to little or no upfront costs. Also, their payment structures vary, with some solutions requiring a flat fee, while others offer a per-measurement pricing structure. At Pledge, we offer access to our solution through a 14-day free trial, followed by a subscription fee-based model that comes with a limited number of free shipment leg measurements. We then offer additional calculations for a low per-shipment leg fee. Check out our pricing page to see an example of an off-the-shelf emissions calculator pricing structure.
One of the major benefits of buying a solution is that providers that specialise in emissions measurement can offer competitive rates because they can spread the costs of building their calculators across many customers. Another benefit is that all the technical support and development costs are included in the price — bug fixes, access to emissions databases and updates. You will, however, still need to consider developer costs for integrating the solution with your current workflows.
3 questions to help you decide which option is best for your business when it comes to costs:
What are the total upfront costs — including development and research expenses — associated with building your own scope 3 emissions calculator, and what are the potential ongoing costs of maintaining it?
What hidden costs, such as access to emissions databases, fuel emissions factors, and accreditation for calculation methodology, should you consider when evaluating the feasibility of building your emissions calculator versus using a third-party solution?
How does the price of off-the-shelf scope 3 emissions calculators compare to the potential long-term costs of building and maintaining your own solution, taking into account the benefits of technical support and included updates?
Internal developer resources
It’s important to realise that integrating a new product — whether building or buying — into your existing workflows will require at least some internal developer resources.
Building your own in-house scope 3 emissions calculator will require significant internal tech resources, whether in the form of existing developers or hiring new additions to the team. If you plan to use your existing developers to create the solution, you’ll need to take into account the time this takes them away from other — possibly business-critical — projects. If you are planning to bring in new developers, you should consider someone with experience and expertise in building similar products as they will add value to your solution.
Outside of product development, you’ll need to consider the time needed for your operations team to integrate the solution into your existing workflows.
When buying a scope 3 emissions calculator, your provider should offer an open API that enables your IT team to quickly and easily integrate the solution into your existing workflows. They should also help manage the testing and trialling stages of the integration, so there’s less of a strain on your operations managers and product teams.
The amount of developer resources needed when buying a scope 3 emissions calculator depends on the quality of the API provided. At Pledge, we’ve created an open API that can be easily integrated into any tech stack, minimising the need to devote developer resources to integrating our solution into your workflows or systems.
Questions to help you decide which option is best for your business when it comes to internal developer resources:
What are the specific resource and time commitments required to build an in-house scope 3 emissions calculator, and how will these impact your existing business-critical projects and operations?
What expertise and experience should you look for when hiring new developers to build your own scope 3 emissions calculator, and how can you ensure they add value to the solution?
When considering the purchase of a scope 3 emissions calculator, what key features, such as an open API and integration support, should you expect from the provider to minimise the strain on your IT, operations and product teams?
Time to value
Depending on the urgency of your scope 3 emissions calculator, time to value could be a crucial factor when determining whether to build or buy. With regulations requiring emissions disclosure for emissions produced in 2024 onwards, you’ll need to factor this into your upcoming business roadmap.
Building an emissions calculator can take a significant amount of time — particularly if you want it to add value beyond basic calculations. Exactly how long really depends on how much financial backing and internal resources you’re able to put behind it. But, anywhere from 6 months to 2 years is a reasonable expectation — at Pledge, we’ve been consistently building our scope 3 emissions calculator since 2021, and we’re still constantly improving.. For your clients, this might be too long to wait with upcoming emission disclosure regulations on the horizon and increasing consumer demand for sustainability.
Time to value is much shorter when buying your own scope 3 emissions calculator — sometimes it can be within minutes if you choose a vendor that offers instant data integration capabilities such as CSV file upload or email. This is particularly important for forwarders who have clients already requesting emissions measurement as part of tenders.
It’s important to realise that integrating with an API will always take some time — exactly how long depends on the quality of API your provider has built and the integration support they provide.
At Pledge, we’ve specifically designed our product so you can sign up and start in minutes. Our open API is designed to be easily integrated into any tech stack, and you can also upload data directly into the platform using CSV file upload, email and data transfer while your integration is in progress.
Questions to help you decide which option is best for your business when it comes to time to value:
Based on the resources you have available, what is the expected time to develop a custom scope 3 emissions calculator internally?
How quickly do your clients require emissions measurement capabilities as part of their tenders?
What is the expected integration timeline for your chosen vendor’s scope 3 emissions calculator API?
Global logistics is one of the only industries with an industry-specific emissions calculation framework — the Smart Freight Centre’s (SFC) Global Logistics Emissions Council’s (GLEC) Framework. The GLEC Framework provides a scientifically assured methodology for measuring emissions in global logistics and allocates accreditations to businesses that meet this criteria. Recently, the ISO 14083 standard on the quantification and reporting of greenhouse gas emissions arising from transport chain operations was introduced, which was built using the standards set out in the GLEC Framework.
Accreditation is not only important for giving your emissions calculator credibility, it also provides rough guidance on the accuracy of its results.
When developing your solution, you should make sure it conforms with the GLEC Framework and is ISO 14083 aligned. Without this level of accreditation, you’ll always be at a disadvantage when compared with other forwarders who have accredited scope 3 emissions calculators.
Before you start building your solution, make sure you know what your clients want to use it for — do they intend to use it to meet regulations or are they also planning to identify areas for emissions reductions? This will inform you of the level of GLEC accreditation you should be aiming for.
When buying a solution, the accreditation your vendor has should be a major consideration. Any vendor you choose should be both GLEC accredited and ISO 14083 aligned, with the view to becoming ISO 14083 compliant once the capability is released. But, if you’re looking for more granular emissions calculations with additional accuracy, you should specify which data inputs you want your emissions calculator provider to be accredited for before signing up.
Questions to help you decide which option is best for your business when it comes to accreditation:
What specific purposes and goals do your clients intend to use your scope 3 emissions calculator for?
What accreditation and compliance would you need from a third-party solution to ensure you meet your clients’ needs?
What preparations would be needed to ensure your in-house scope 3 emissions calculator is aligned with the GLEC Framework and ISO 14083 standards?
Future-proofing your business
A solution that can adapt to the changing nature of the emissions measurement and reporting landscape in global logistics is essential for long-term usability and industry relevance.
When building your solution, stay one step ahead by ensuring you’re closely monitoring potential changes for emissions measurement in global logistics — particularly if you operate across multiple regions. Any changes — for example, a requirement to have your solution third-party verified, or changes to the required level of accuracy — will need to be developed to strict deadlines to avoid the risk of incurring fines or being restricted from operating — potentially leading to loss of business.
As things can move quickly in the logistics space, ensure your developers and product team are aware of any potential changes at all times.
An emissions measurement provider depends on helping companies meet their emissions disclosure requirements, so they should be well informed of upcoming regulatory changes that might affect your business. This means you shouldn’t need to dedicate resources or costs to keep up to date with changing needs — a good provider will do all of that for you and keep you informed about it, too.
One of the major benefits of buying a scope 3 emissions calculator is that if they fail to keep up with changing regulations, you can simply change provider, further reducing the risk that your business will fail to meet any industry emissions disclosure requirements and incur the penalties that come with it.
Questions to help you decide which option is best for your business when it comes to future-proofing:
How can you ensure your in-house measurement solution adapts to evolving industry regulations and reporting standards over time?
Which option is best placed to proactively monitor and integrate changes in emissions measurement requirements across different regions and jurisdictions?
Can your scope 3 emissions calculator provider supply concrete examples or case studies of how it has successfully responded to past industry changes and regulatory updates?
So, should you buy or build your scope 3 emissions calculator?
That decision ultimately depends on your business's needs. Forwarders looking for a scope 3 emissions calculator that can be implemented instantly, has very little upfront costs and can be easily integrated should certainly consider buying a solution rather than building one from scratch. This is particularly suited to forwarders on a tight budget who want to maximise the value to their clients without significant upheaval.
But, there are certain circumstances when building your own solution may be a good option — particularly for forwarders that have large budgets and aren’t constrained by the limited time to value that comes with building a scope 3 emissions calculator. After inputting the significant costs, time and internal resources necessary to develop an in-house solution, it can be just as effective as an off-the-shelf solution, but would still require ongoing resources and costs to maintain.
At Pledge, we’ve developed a scope 3 emissions calculator specifically built for freight forwarders to offer their clients instant, accurate and transparent emissions measurements. It’s GLEC accredited and ISO 14083 aligned, and our Clarity™ feature adds extra value by offering additional transparency that other vendors in the market can’t offer.