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THE SUPPLIER CASCADE

A PRACTICAL APPROACH TO ACCELERATING SUPPLY CHAIN DECARBONIZATION

The Supplier Cascade gives businesses a manageable way to address Scope 3 emissions through Tier 1 supplier engagement. Built from best practice, it focuses on enabling action in the areas that are within a business’s control.

Organizations create tangible climate action by asking their Tier 1 suppliers to set a credible emissions target aligned with science, publicly report their progress against targets, and cascade the approach to their own Tier 1 suppliers and beyond. The Supplier Cascade can create a domino effect of climate action as each subsequent tier of the supply chain asks its own Tier 1 suppliers to take action.

Please join us to create tangible climate action throughout the supply chain.

Download the Supplier Cascade explainer to learn more about the approach and how it can benefit your business.

Download now (380kb, pdf)

Created in partnership with BSR, CDP, Ceres, Environmental Defense Fund, Exponential Roadmap Initiative and SME Climate Hub, and in collaboration with the Science Based Targets initiative.

WHY USE THE SUPPLIER CASCADE?

Action-oriented: companies need not wait for challenges around accurate Scope 3 emissions data to be solved

Evidence-based: built from best practice and backed by research and consultation

Focused: Tier 1 suppliers are asked to make credible climate commitments and cascade the same action onwards

Measurable: prioritizing metrics that are within an organization’s control

Straightforward: no deep technical knowledge required, enabling implementation by procurement teams

Flexible: businesses can engage and incentivize their suppliers however they choose

Cost saving: buyers support a unified ask, saving suppliers resources from responding to bespoke requests

Scalable: the approach generates climate action far beyond an organization’s own supply chain

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How it works

Businesses ask their Tier 1 suppliers to set a credible emissions target aligned with science. Businesses have complete flexibility and freedom in the way they incentivize their suppliers.

Tier 1 suppliers continue the cascade by asking their own Tier 1 suppliers (also called Tier 2 suppliers by the original business) to set a credible emissions target aligned with science.

Tier 1 suppliers who have made a credible emissions targets aligned with science report progress against their targets annually, so customers can access public primary data on emissions reductions in their supply chain.

Businesses also report annually on supplier action progress: - the number of their Tier 1 suppliers that have made a credible emissions target aligned with science, and those that have cascaded the approach.

Through publicly accessible and comparable reporting, businesses share what they are doing and encourage others to act.

Reducing emissions in our upstream supply chain has a potential impact many times greater than the reduction of CO₂ emissions from Philips’ own operations, so addressing our Scope 3 emissions has a real knock-on effect – minimising our overall carbon footprint and that of our suppliers and customers. We are proactively helping our supply chain partners to decarbonise, including sharing tailored guidance and practical training. We’re also ensuring accountability through on-site visits, to help partners improve their climate maturity. The sooner every business encourages their suppliers to understand and act on their emissions, the sooner we will reach net zero together – which is why the Supplier Cascade is so essential.
Tom Scholte, Sustainability Manager for Group Sustainability, Philips

We were one of the first seven companies in the world to have our net zero targets approved by SBTi, but we know that reducing global emissions is not something that anyone can do alone. Engaging with suppliers is critical for every business – we must all work together to engage our partners and embed decarbonization across value chains. We’re urging our supply chain partners to set a clear decarbonisation plan and make it public, to mobilise employees in support of their aims, and to engage their own suppliers to cascade targets upstream too. Together, we can ensure a major knock-on positive impact for people and planet.
Robert Williams, Director of Sustainable Procurement at AstraZeneca

Cascade climate action

Businesses of all sizes and from all sectors have committed to starting their own Supplier Cascade. Join them as an Early Adopter to contribute to the discussion and receive tailored support in taking control of upstream Scope 3 emissions.

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Q&A

Key questions about the Supplier Cascade answered

Who is eligible to use the Supplier Cascade?  

Any business with a credible net-zero commitment is eligible to participate.  

 
What counts as a credible net-zero commitment? 

A credible emissions target should be aligned with science.  The most ambitious are a commitment or validated target with the Science Based Targets initiative (either near term target or Net-Zero Standard) or, for small and medium-sized enterprises (SMEs), making the SME Climate Commitment.
How do you define SMEs (i.e., small- and medium-sized enterprises)?

An SME is defined as an organization with 500 employees or less.  
What does this approach cover?

The Supplier Cascade provides an approach for addressing upstream supplier emissions associated with fuel combustion and purchased electricity. This approach does not cover other types of Scope 3 emissions (e.g., downstream emissions, those associated with land-use change, emissions from farm fields). 
Does this replace the need for businesses to address other aspects of their Scope 3 emissions?  

No, businesses need to understand all material sources of Scope 3 emissions and use this approach in conjunction with strategies to reduce other sources of Scope 3 emissions (e.g., downstream emissions, those associated with land-use change, emissions from farm fields). 
Do all suppliers need to join the Supplier Cascade?

Businesses should ask all Tier 1 suppliers to adopt the Supplier Cascade approach, but if there is a need to prioritize support then businesses can start with those that represent the biggest spend.  Best practice is that a majority of Tier 1 suppliers by spend are required or incentivized to adopt the approach within the first two years of implementation.  
What is a Tier 1 supplier?

A Tier 1 supplier is an organization with which a business has a direct purchasing relationship.   
What should be reported annually as part of the Supplier Cascade?

Each business should report its Scope 1 & 2 emissions and at least one indicator of supplier action (e.g., the percentage of Tier 1 suppliers who have also set a credible emissions target aligned with science).
Where should businesses report as part of the Supplier Cascade? 

Best practice is to annually report to CDP if a business has made a science-based target, or the SME Climate Hub if they have made the SME Climate Commitment, as both these platforms allow data to be publicly reported.  Businesses can also collect data as part of their existing supplier survey processes. 

In the future, it is likely that the capacity to track the cascade will be built out further to include the percentage of Tier 1 suppliers who are also asking their own Tier 1 suppliers to set a credible emissions target aligned with science.
What is required of businesses who are Early Adopters of the Supplier Cascade?

Businesses who would like to be an Early Adopter will have access to the coalition of NGOs who developed the approach if they have questions and/or need guidance.  In return, they will be asked to share feedback and data from the implementation of the approach with the coalition of NGOs so that its efficacy is understood and can be used to inform subsequent guidance.  

Early Adopters will be eligible to participate in future Supplier Cascade events highlighting their progress and will get access to a dashboard showing their progress against anonymized progress other businesses are making in implementing the approach.  
What technical support is available for implementation of the Supplier Cascade, including helping suppliers to act?  
For making a credible emissions target aligned with science and setting targets:
- SBTi Corporate Net-Zero Standard
- SME Climate Commitment
For scope 1 and 2 emissions reductions  
- Mission Possible Partnership 
For reporting  
- CDP Guidance for companies
- SME Climate Hub Reporting Tool
For supplier engagement