How to Engage Your Suppliers in Your Carbon Footprint Reduction Journey
When companies perform a carbon emissions assessment, they don’t just learn about their own organisations, but also those they collaborate with. In fact, for a large number of companies, supply chain-related emissions make up a large portion of their Scope 3 emissions. Therefore, an assessment of suppliers is a hugely important factor in an environmental impact analysis, as a company’s Scope 3 emissions are usually 11.4 times more substantial than their direct operational emissions.
The following categories under Scope 3 address emissions associated with the supply chain:
Category 1 - Purchased Goods and Services
The emissions covered by this category refer to all upstream (cradle-to-gate) emissions produced from services and products that the company has purchased from its suppliers, and this includes both direct and indirect procurement.
Category 2 - Capital Goods
The emissions under this category refer to all upstream (cradle-to-gate) emissions produced from facilities, buildings, vehicles, and equipment that the company has purchased from its suppliers.
Category 4 Upstream Transportation and Distribution
The emissions associated with this category refer to how companies manage their logistics with their suppliers, that is all the third-party transportation and distribution of products that the company has purchased.
For a company to achieve its corporate sustainability goals, it must ensure that its suppliers are equally engaged in environmental performance improvement. So, discover more about engaging your suppliers in your carbon footprint reduction journey below.
Bringing a Net Zero Strategy to Life
The achievement of environmental impact solutions relies on decarbonisation across supply chains. In fact, this is one of the most effective ways in which companies can accomplish net zero. Despite this, the challenge lies in the limited visibility into supply chain emissions, as well as the limited influence over suppliers’ emissions reduction methods. That said, how can companies engage suppliers with carbon reduction initiatives?
Engaging Suppliers with Carbon Management Strategies
First and foremost, improving sustainable operations management requires companies to clearly communicate their own strategies and targets to their suppliers. This might include specifying their performance expectations, timelines, and what suppliers can do to meet the company’s goals for greenhouse gas emissions reduction.
Once the company has made its expectations and timelines clear to its suppliers, it will still need to observe and assess the suppliers’ performance. This is to make sure that their performance continues to meet the sustainability expectations that were originally laid out.
Most importantly, engagement is a two-way street. This means that companies must openly communicate and collaborate with suppliers, and vice versa, if they’re to see a meaningful impact. After all, some suppliers may struggle to become more sustainable and reduce their carbon emissions, as implementing decarbonisation isn’t necessarily a straightforward process. For instance, suppliers require the finances, knowledge, and capacity to put decarbonisation measures in place, and this isn’t always readily available.
It’s for this reason that companies concentrating on their carbon emissions need to offer support to their suppliers. This support might come in the form of resources, training, capacity building, etc. For example, companies can use workshops, webinars, and capacity-building initiatives to provide training to their suppliers. Such training is crucial for helping suppliers understand carbon accounting and bring reduction strategies to life. Similarly, companies might offer financial assistance or incentives to support suppliers with lower profit margins in making their practices greener. This is without mentioning the importance of recognising and rewarding suppliers boasting a strong sustainability performance. Recognition and rewards might come in the form of public recognition, awards, or preferential treatment in procurement decisions.
The Power of Sustainability Consulting Services
consulting services, helping companies assess their carbon footprint and make the necessary steps to improve it. If you’re ready to progress in your carbon reduction journey and engage your suppliers in doing so, be sure to learn more about our carbon accounting services.