With just seven years remaining to drive a 50% reduction in Scope 3 carbon emissions and stay on track with global climate goals set by the Paris Agreement, businesses are looking at how they can cut emissions across their supplier portfolio.
Our CEO Liam Salter recently joined our technology partner TradeBeyond’s Senior Vice President, Eric Linxwiler, for a webinar to discuss how retailers and brands can implement plans to cut supplier emissions in half by 2030, sharing best practices for ensuring success.
A fundamental part of the conversation centred around RESET’s six-step plan for driving 50% reduction across a given supplier portfolio, which we summarise below:
1. Buyer Emissions Projections
The first step for a brand or retailer looking to cut Scope 3 emissions is to map its current supplier emissions and then to project those emissions forward to understand where they are going. In doing so, we can understand roughly what its emissions baseline is expected to be from suppliers.
At this stage, it’s also important to consider what the business is likely to be doing moving forward. If business growth is high, it makes the carbon challenge a lot more difficult, so we need to be cognizant of this early in the discussion so that we can prepare to manage it.
2. Supplier Segmentation
With the baseline defined, the next step is to understand how emissions are concentrated and how individual suppliers or groups of suppliers are contributing towards emissions. Through supplier segmentation, the suppliers that are generating the most emissions from the fewest number of sites can be identified (hotspot suppliers). Budget and resources can then be focused on those emissions hotspots to deliver against reduction targets.
Once a strategic carbon-intensive supplier base has been identified, we can start modelling to understand what reductions can be achieved, mapping potential emissions reductions into your supplier segmentation to develop an initial strategy about which suppliers to engage and how much reduction to strive for.
3. Targets & Action Plans
The third step is to engage those priority suppliers using a target and action plan methodology. At RESET, we’ve developed a methodology to teach suppliers how to do the carbon accounting, how to build carbon action plans and to build their own targets and action plans, which they can then go and execute.
Through our collaboration with Apparel Impact Institute (Aii), we’ve co-developed the Carbon Leadership Program (CLP), which is the largest supplier carbon engagement program. Within the CLP, we’ve built a carefully structured approach to developing targets and action plans with large manufacturing suppliers.
After targets and action plans have been set by suppliers, it’s essential to support the implementation and execution of those action plans by the suppliers to deliver the carbon target . To achieve this, brands should maintain an ongoing dialogue with strategic suppliers on their action plans and carbon performance.
Brands can also develop relationships with solutions providers to support suppliers in achieving their carbon goals. This can include local carbon services providers, technology initiatives and financing programmes.
RESET provides a full suite of implementation support services led by our engineering team and supported by innovative partnerships such as our alliance with DBS bank to offer innovative financing solutions.
Often, strategic supplier engagement programs alone aren’t enough to get all the way to the target.
As well as strategically reducing supplier emissions, shifting procurement volume out of high carbon suppliers and into the lower carbon suppliers that have reduced their emissions can ensure targets are met.
6. Monitoring, Reporting & Engagement
The final step is to have a monitoring, reporting, and engagement strategy to manage these conversations going forward. Monitoring and engagement are key, as they empower firms to collect, analyse and manage their own data independent of external parties and inform organisations of their progress in reaching their carbon emissions target.
Our Supplier’s Carbon Management Tool (SCMT), which was co-designed and developed with TradeBeyond, enables businesses to engage suppliers to develop and implement carbon reduction action plans, tracking supplier implementation performance versus targets into the future.
Businesses can accelerate their decarbonization journey and start reducing supplier emissions to meet their targets by following these six key stages. For more information on how our team of carbon engineers and consultant across Asia can support your emissions reduction journey, please get in touch with our team here.
You can listen to the webinar in full below.