Extensive research conducted by organisations such as CDP, McKinsey and BCG indicate that companies’ supply chains can generate, on average, approximately 11.4 times more total carbon emissions than operational emissions. As such, in recent years, the focus and push for companies to decarbonise their supply chains (and achieve net zero in the process) has grown.
Prominent sustainability frameworks and standards, including CDP, the updated SBTi recommendations, and ISO 20400 (which pertains to sustainable procurement) highlight that one of the biggest, and most impactful ways in which to do this is through active supply chain engagement, which is also a significant factor in attaining A-list status with CDP.
Companies often perceive supply chain emissions as challenging to control and manage, yet reframing this perception is crucial. It can create opportunities for collaboration, as well as the strengthening and building of relationships with supply chain partners which will ultimately enhance efficiency, transparency, and resilience across the entire value chain.
Supply chain engagement with the goal of decarbonisation involves the use of numerous tools and methods to drive sustainable practices and initiatives among suppliers. This can involve a multitude of processes such as facilitating GHG emissions disclosures and setting emission reduction targets for suppliers. In our experience, it is common for companies to begin their decarbonisation journey with suppliers by calling for them to complete of an annual CDP Supply Chain Questionnaire or even a more informal questionnaire regarding their emissions profile. Sometimes these requests are made as a prerequisite to supplier onboarding. In many instances this process serves as a catalyst, encouraging suppliers to take the foundational step of completing an annual carbon footprint.
Earlier this year the SBTi published its guidelines on supplier engagement, ‘Unlocking the Power of Supply Chains for Decarbonization‘, which gives companies guidance and support for engaging with their supply chains to set science-based targets.
For companies which might not feel equipped or ready to step into the realm of science-based targets there are other foundational steps which can be taken. This may involve supplying training resources, organising workshops, and offering educational activities to instruct suppliers on the advantages and techniques for emission reduction. It is always important to remember that your suppliers’ level of maturity in their carbon management journey will affect the nature of your engagement.
In conclusion, the shift toward supply chain decarbonisation is no longer an option but a necessity for companies aiming to achieve net zero goals. Engaging with suppliers is the key, and it’s emphasised by leading sustainability frameworks. By reframing supply chain emissions as opportunities for collaboration, companies can build stronger relationships, enhance efficiency, and promote sustainability across the value chain. Whether it’s through setting science-based targets or starting with foundational steps like education and renewable energy sourcing, every effort counts. Remember, the nature of your engagement should align with your suppliers’ carbon management journey. It’s time for a collective push towards a greener future.