EcoVadis at COP26: Setting the Agenda for Supply Chain Decarbonization at Scale

November 10, 2021 EcoVadis ‏‏‎

All eyes are on Glasgow, where world leaders are meeting  this week to set ambitious greenhouse gas reduction targets and secure net-zero globally by 2050. EcoVadis’s Head of Sustainability Innovation, Julia Salant, is at COP26 to amplify a crucial message: in order to limit global warming to 1.5°, sustainable procurement must take center stage in business-led climate action. 

While Policy Negotiations Are Underway, Supply Chain Leaders Must Step Up and Act

Alongside other organizations in the public, private and non-profit sectors, EcoVadis has for many years been working to establish the importance of supply chains for global climate action. While policymakers are negotiating at COP26, public concerns are growing that the climate talks will not fulfill Paris Agreement goals. And with political commitments lagging behind expectations, the corporate sector finds itself bearing an even greater responsibility to move beyond targets and take action at scale, across the entire value chain. 

Not only do Scope 3 emissions across corporate value chains account for up to 80% of a company’s total greenhouse gas footprint, but value chains also represent an enormous lever for global decarbonization. Supplier engagement can unfold cascading emission reductions no matter the regulatory framework, and leverage relationships to accelerate climate action. Corporate leaders have to step up the scale of their engagement to reach ambitious net-zero goals: In the EcoVadis Sustainable Procurement Barometer 2021, developed jointly with the Value Chain Innovation Initiative at Stanford Graduate School of Business, 96% of surveyed CEOs identified the achievement of corporate sustainability goals as a key driver behind their sustainable procurement programs. 

COP26, Scope 3, Supply Chain, Carbon emissions
Download the Sustainable Procurement Barometer 2021 to find out more about the latest trends in sustainable supply chain management

Supply Chains are Being Recognized as a Lever for Decarbonization 

It is encouraging to see that the crucial role of sustainable procurement is increasingly being recognized in policy, academia and the wider public, including at COP26. Important resources are being devoted to supply chain climate action, among them the launch of the Exponential Roadmap Initiative’s 1.5° Supplier Engagement Guide – a crucial toolkit and platform that understands the need to support small and medium enterprises (SMEs) to drastically reduce emissions by 2030 and achieve net-zero emissions by 2050. WBCSD’s flagship project, SOS 1.5 (Safe Operating Space), shared new consultation findings on supplier incentivization levers that allow companies to move towards action on supply chain decarbonization, with both penalty-based and reward-based incentives. 

But much work remains to be done: EcoVadis data reveals that fewer than 15% of SME suppliers reported on their greenhouse gas emissions in 2020, even though they account for 70% of global supply chains, and our blog has recently highlighted some of the challenges that contribute to this data gap. EcoVadis is thus thrilled, together with the UN Environment Programme and the International Law Association, to have shared the strategic need for supply chain action live in Glasgow, raising awareness of the scale of engagement required  in the near-term future.

How Technology-Powered Sustainability Ratings Drive Decarbonization  

At Glasgow Hall, Julia Salant discussed the important topic of Mitigating Climate Change through Low Carbon & Energy Efficient Procurement. Her message was loud and clear: In order to move from ambition to action, we need a technology-powered approach to supply chain decarbonization. Through the help of dedicated technology platforms, such as the EcoVadis Carbon Action Module, companies can provide their suppliers with scalable solutions to build capacity and improve performance.

Private-sector innovation can help overcome data and transparency challenges: With the EV Carbon Action Module, companies gain visibility into the carbon management practices of their trading partners, and can drive improvement through dedicated tools, including eLearning offerings and corrective action plans. The Carbon Action Module also lets companies access absolute data and intensity metrics on their suppliers’ greenhouse gas footprint, and identify next steps in their low-carbon procurement journey. 

Learn how an ongoing engagement with the ratings process is helping companies increase positive social and environmental impact in the Business Sustainability Risk and Performance Index 2021

Harnessing the Multiplier Effect of Supply Chain Climate Action 

Through the unique network effect of supply chain-driven climate action, global companies can amplify their positive impact. The EcoVadis community currently comprises over 700 buy-side companies that rate and work with more than 85,000 of their trading partners. Combined, they cover $1.3 trillion in sustainable spend, and positively impact the lives of 32 million supply chain workers. 

As is explored in the recent EcoVadis Network Impact Report, the positive impacts arising from such action include rated companies that are starting to source renewable energy, calculate their carbon footprint in line with global standards, or provide environmental training to their employees for the first time. And, crucially, there are many more positive impacts to come, as this first tier of companies starts to engage with trading partners of their own, cascading sustainable practices further up the value chain.

We Have No Time to Lose – At COP26, and in Your Day-to-Day Operations  

While COP26 is bringing together a variety of stakeholders, resources, and issues, there is one univocal message: Humanity has no more time to lose. If you are looking to learn more about how to address your own company’s carbon footprint and reduce your emissions, take a look at our new e-learning platform, the EcoVadis Academy, to start building your team’s capabilities. 

And if you already have an understanding of your Scope 1 and 2 emissions, but lack visibility into your value chain, get in touch to explore how the Carbon Action Module can help you take the first step to effectively engage suppliers on emissions reduction. COP26 is a wake-up call for every organization, no matter the size of your greenhouse gas footprint, and there is no better time to take action than now! 

About the Author

EcoVadis ‏‏‎

EcoVadis is the world’s most trusted provider of business sustainability ratings, intelligence and collaborative performance improvement tools for global supply chains. Backed by a powerful technology platform and a global team of domain experts, EcoVadis’ easy-to-use and actionable sustainability scorecards provide detailed insight into environmental, social and ethical risks across 200+ purchasing categories and 160+ countries.

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