Cracking supply chain decarbonization
María Mendiluce
Let’s talk about engaging suppliers to reduce emissions. For many companies a huge 90% or more of their emissions are in their value chains. Companies serious about reducing their carbon pollution need to address these Scope 3 emissions – fast.
It also makes business sense. From risk resilience to first-mover advantages and preparedness for incoming regulation, companies that engage their suppliers to cut emissions can yield a range of business benefits.
Getting the right information and collaborations to crack supply chain emissions can be costly and complex. So, We Mean Business Coalition and partners are testing and incubating new ways to accelerate supply chain engagement – and we have made supercharging SME climate action a priority.
See how to engage suppliers of all sizes
Supplier engagement is the best place to start. Every company should set its own targets aligned with science and call on its tier 1 suppliers to do the same. But can companies then trigger a cascade of action though the supply chain?
With partners, the Coalition is trialing this practical approach to supply chain decarbonization called the Supplier Cascade. I welcome the companies that have signed up as early adopters – and look forward to sharing results and learnings with the We Mean Business Coalition community later in the year.
See more ways to engage suppliers now
SME climate action is critical to cutting global supply chain emissions and building resilience. Small and medium-sized enterprises (SMEs) are the backbone of economies and communities. They make up 90% of businesses globally and in some countries, over three-quarters of smaller businesses are part of supply chains.
SMEs want to take climate action but, as the recent SME Climate Hub annual survey shows us, they face barriers including a lack of time, incentives and resources. With today’s SMEs the mid and large-sized companies of tomorrow, I believe that if we give them the right tools now they can decouple their growth from emissions.
This is why I’m proud of the ever-growing suite of reporting and actions tools available to SMEs via the SME Climate Hub, an initiative we created in partnership with the Exponential Roadmap Initiative and the UN Climate Change High Level Champion’s Race to Zero campaign. The new SME Mobilization page has tools corporates can use to get their SME suppliers to make a climate commitment and take action to deliver on it.
Beyond asking companies to set targets and directing them to resources such as the Hub, leading businesses tackling value chain emissions use a range of tactics to tackle emissions hotspots, from incentive strategies and green procurement rules to the redesign of products. In fact, there is a wealth of approaches, guidance and case studies already available – we’ve collated them here.
Companies always tell us that getting the actual data on value chain emissions is a struggle. But don’t let perfection be the enemy of momentum. Companies don’t need perfect data on their value chain emissions to begin acting upon them.
And with businesses and communities already feeling the cost and human impacts of extreme weather from a dangerously overheating planet, the urgency to build resilience and protect people and economies is growing every day.