As businesses increasingly recognise the importance of addressing their carbon footprint, Scope 3 emissions – indirect emissions arising from the supply chain and product lifecycles – have come into focus. These emissions can make up 80-90% of a business’s total emissions and therefore is a considerable opportunity area for reduction activity. With businesses overarching ESG goals now commanding Scope 3 reduction targets, how can they act on this?
It starts with engaging your procurement team – as they typically hold overarching relationships with suppliers. Therefore they must be involved in driving the decarbonisation journey.
Below are practical steps to make progress for procurement teams to engage with their supply base and make this a reality.
Understanding your supply base in this area
Firstly, harness tender submission information by compiling what you already know about your active supply base. If you used sustainability criteria to select your suppliers, there will be information you can quickly draw on. Use this information to open conversations about what is already being done; particularly if reduction targets and initiative criteria were part of the selected criteria.
Segmentation and risk profiling of your supplier base is another beneficial step to guide effort effectively. The segmentation and risk profiling could consider the following factors:
- Highest emissions
- Largest data gaps
- Easiest areas for improvement
- Geography based on Global Manufacturing Risk Index
- Existing relationships
Doing this exercise will highlight which aspects of your supply chain contribute most significantly to your carbon footprint, identifying hotspots and helping to prioritise where to act. If you have a global business reduction target for Scope 3 emissions, break this down into supplier categories, to motivate and enable progress to be tracked more granularly.
Working with your supply base to make progress to targets a reality
Education and awareness are key, as when suppliers and stakeholders understand the impact and what the potential reduction possibilities are, they can make informed decisions. Awareness fosters a sense of responsibility, encouraging progress against emission reduction strategies. There is a required behavioural shift, to rethink energy sources, processes, materials, and ways of working. By understanding the consequences of their choices, suppliers are more likely to embrace sustainable alternatives.
Collaboration is vital for Scope 3 reduction activity, but remember that suppliers will have multiple customers potentially asking for the same information and plans; how can you collaborate across industry to unlock the most progress? Having conversations with multiple stakeholders, all with the same desired outcome is the first step. There are other ways to collaborate including:
- Jointly brainstorming emission reduction initiatives
- Providing expertise to understand the impact of reduction strategies
- Financial contributions to an initiative
- Shared resource for data or progress tracking
- Setting a joint SBTi (Science Based Targets Initiative) target
Keeping progress moving
Ongoing due diligence is required once emission reduction initiatives are in flight, to track progress. They will need a clearly defined cadence, which will be initiative dependent but cognisant of wider business ESG updates (e.g. annual impact report).
Due diligence should also be seen as a continuous improvement opportunity both in data quality and maturity and initiative effectiveness; with risk management and the ability to pivot emissions reduction activity if progress to targets is not being met.
Less impact, better business performance, now and for the future
Reducing Scope 3 emissions requires a concerted effort from businesses and their suppliers. By prioritising Scope 3, leveraging procurement power and influence, and fostering cross-industry collaboration, we can make a tangible impact on global emission reduction. The journey won’t be linear, but each ripple and small progress step; can generate a tidal wave in the future.
This article is part of a series diving into sustainable procurement, explore more here and here.
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