Net Zero pledges are reaching “critical mass”, but can they cause a Chain Reaction?Sustainability
Progress on sustainability is notoriously hard to measure for organizations, but the needle is moving in the right direction. A new report from the Science-Based Targets Initiative (SBTI) found that 2,000 firms across 70 countries worth $38 trillion have set emissions reductions targets that line up with the science.
It’s incredible to see the strides we’ve made over the past year or so. But, of course, there are still significant challenges ahead on the road to a greener future. According to the SBTI, the next hurdle lies outside of organizations’ four walls in organizations’ supply chains. The report explains that:
“Scope 3 emissions reduction is a key challenge for companies, often due to a lack of visibility and monitoring of suppliers’ data. Companies also face engagement gaps between their suppliers and procurement teams.”
Closing these visibility and engagement gaps is critical to reducing emissions, but we’re a long way off. Spend Matters found that almost 70% of organization’s emissions come from their supply chain. However, our latest supplier sustainability research found that just 24% of suppliers are being measured routinely on carbon emissions.
The SBTI is conducting a review into scope 3 targets and criteria. But time is of the essence for organizations. Laggards in sustainability will quickly find themselves left in the dust of competitors. So, how can organizations do more to measure emissions across their supply chains?
Look at the view to stamp out CO2
A key challenge for organizations is that most industries suffer from inaccurate and unreliable supplier data that is dispersed in silos. This makes it much more challenging to bring together emissions from within the organization, third parties, and suppliers, and see a complete picture of carbon emissions.
This is why a smarter approach to procurement is critical. It will enable organizations to gain a 360-degree view of their entire supply chain, by bringing together supplier and third-party data on everything from environmental impact to supplier capabilities. This single source of truth will include data from immediate suppliers, sub-tier suppliers, and subcontractors – which helps to ensure that green promises are not just surface-level.
In fact, organizations can see an example of this in action at an Ivalua event on the 15th September. This brief event will see the winners of Ivalua’s Carbon Footprint Innovation Cup for 2022 demonstrate their “Sustainability Tracker”. The tracker allows for real-time carbon impact tracking, proactively managing carbon footprint, and taking an innovative approach to reducing scope 3 CO2 emissions across the supply chain. You can sign up for the virtual event by emailing email@example.com.
Collaborate to innovate
Organizations can also work more closely with suppliers to reduce their emissions, working to build green initiatives together instead of laying down the law with prescriptive sustainability targets. For example, Groupe ADP adopted a smarter approach to procurement to collaborate with suppliers on CSR initiatives. This led to it almost doubling its independently-rated CSR score, while still driving savings of 10% each year.
More than ever, suppliers are aware of the responsibility that should be placed on them as part of a more tight-knit, open, and collaborative relationship. It’s now time for organizations to look beyond their own headquarters, invest in their supply chains, and to convert that expectation into action.
Sharing intel will be vital
It’s not just about working with suppliers though. Once organizations have made valuable progress on sustainability, they can’t keep learnings to themselves. We need to share our progress and work with other organizations to make a more significant impact.
On the 7th September, 2022, Ivalua will host a dinner exploring how recent disruptions have affected sustainability commitments, and how technology can help to manage this tricky balancing act.
The evening will be hosted by me and we will have our VP Product Marketing, Vishal Patel leading the discussion. Attendees will be a small group of senior procurement and supply chain professionals from manufacturing, financial services and construction. You can register our interest to join the event here.