Find out how to make your business more sustainable in 2024
Refresh your sustainability journey today! Book to join us on 14th February, 13.30-17.00, at Marks & Clerk, Cambridge to find out how to make your business more sustainable. In the meantime, sustainability experts Planet Mark, share their top 5 tips for making your supply chain more sustainable:
With the climate clock ticking, reducing Scope 3 emissions has become a top priority for companies around the world, especially those that have committed to net zero. With Scope 3 potentially representing over 90% of a company’s carbon footprint, already it becomes clear to see why this is a much harder area to tackle.
Businesses are now entering an era of collaboration to reduce their Scope 3 carbon emissions by identifying new solutions, enhancing knowledge, sharing best practices, and driving collective action at systemic and industry levels.
A collaborative mindset will allow you to accelerate the progress of existing partnerships and create new ones where gaps need to be filled. Having visibility into your supplier base is crucial for your business to take proactive measures:
- It allows you to make informed choices about how and where to allocate your resources to deliver maximum impact
- It empowers your supply chain officers and procurement leaders to implement responsible procurement practices throughout your organisation, leading to significant reductions in upstream Scope 3 emissions.
- It uncovers various opportunities for your company to enhance brand value, extending beyond emission reductions to creating an efficient, resilient, cost-effective, and customer-centric supply chain network.
With the right combination of visibility, actions, and collaboration, your business can reach your sustainability goals and accelerate the decarbonisation of your supply chain. Here are 5 principles for engaging your supply chain:
Define your baseline
Collecting data on current emissions from the supply chain serves as a foundation for measuring progress. It provides a starting point for identifying emission hotspots and setting realistic reduction targets. Without accurate data, it becomes challenging to track progress and evaluate the effectiveness of emission reduction initiatives.
During this process, supplier trust is a significant factor to consider. Often, suppliers are unsure about how their data will be used and may worry about potential penalties or loss of business if their responses are not deemed satisfactory. It is vital for your team to be open, transparent, and communicate that data collection is part of an ongoing process and journey, benefiting both your company and your suppliers. By understanding their baseline, you can develop strategies to provide support. This approach is crucial for building meaningful and long-term relationships with your suppliers.
Understand your suppliers: map and segment
Supplier mapping allows you to understand and target suppliers who have the biggest influence on your supply chain impact and identify what they need to do differently. By identifying and understanding the various suppliers in your value chain, your business can effectively prioritise your engagement efforts and develop targeted strategies for emission reductions.
One approach does not fit all. A common challenge is not fully understanding the maturity, knowledge, and current activities of your suppliers. By understanding your suppliers’ capabilities, opportunities, and motivations, you will be in a much better position to set realistic and achievable goals:
- Capability: Do your suppliers have the knowledge, skills and abilities to reduce their carbon emissions? When your suppliers have greater capacity, you can learn from their expertise and identify potential areas for collaboration or joint investments in reduction projects.
- Opportunity: You may consider creating opportunities for your clients and suppliers by implementing sustainable procurement policies, offering incentives for emissions reduction, and integrating environmental considerations into supplier selection criteria.
- Motivation: It is important to understand your suppliers' motivations, including their attitudes, values, and perceived benefits, to create effective engagement strategies. This may involve highlighting the economic benefits of emissions reduction, showcasing leadership opportunities, or appealing to suppliers' commitment to corporate social responsibility.
Foster collaboration and support suppliers
By fostering a sense of shared responsibility and building strong partnerships, you can collaborate with your suppliers to achieve shared sustainability goals.
Get the conversation started
Initiating the discussion about climate with suppliers will provide an opportunity to directly communicate expectations. It’s important that you clearly articulate your commitment to reducing Scope 3 emissions. By setting ambitious targets and publicly sharing your sustainability goals, you can send a strong message to suppliers about the importance of emission reduction. This can be done through sustainability reports or by updating the supplier code of conduct to include specific emission reduction requirements.
Sustainable procurement must be purposely done. Re-think your procurement policies and procedures and re-write them with sustainability at their core.
Ask your procurement team to consider applying such requirements to existing contacts where applicable. These teams must be trained on your company’s decarbonisation strategy, and the role they can play in their relationship with suppliers. Their buy-in is fundamental.
While some suppliers might be on track already to halve their emissions, others might not know where to start. Link suppliers to useful public resources and offer ad-hoc support where needed.
Ongoing communication with your suppliers has three key objectives:
- Reminding suppliers about the actions they can take to reduce their environmental impact.
- Raising awareness and educating suppliers about your company's vision and goals
- Inspiring action and encouraging behavioural change among suppliers.
Establish processes for ongoing communication, such as periodic meetings, webinars, or forums dedicated to sustainability. These platforms allow for updates on progress, and the sharing of success stories. They also provide an opportunity to address any challenges or barriers faced by your suppliers and explore potential solutions together.
Establish a transparent and annual tracking process
Define a clear process to track supplier climate performance at least annually, leveraging both disclosures requested from suppliers and publicly reported indicators. Note that suppliers' reporting will cover their entire organisation's scope of emissions, not just those directly associated with the production of the company's products. This tracking process helps to foster transparency and much-needed collaboration on your sustainability journey.