The Roadmap to Supplier Decarbonization: From Starting Simple to Embracing Science

September 5, 2023 EcoVadis

Speaker: Julia Salant, Carbon Solution General Manager, hosted by Fergal Byrne, Executive Producer, The Sustainability Agenda 

Available on: Spotify | Apple Podcasts | Google Podcasts 

As businesses and public organizations strive to implement the principles of sustainable procurement, understanding your company's carbon emissions is essential, and indirect emissions, i.e., those coming from the supply chain are a key part of that. In fact, as Julia Salant, General Manager for the carbon solution at EcoVadis, explains, Scope 3 emissions constitute a vast chunk of all carbon emissions and as such should be a priority for businesses. The management of Scope 3 emissions isn’t easy – as it falls outside of companies’ direct control, but is essential for sustainability and builds transparency and trust among stakeholders, investors, and customers.

Taking the First Step in Decarbonization

Starting the decarbonization journey may seem daunting. But, Julia emphasizes the importance of measurement. Establishing a baseline for your emissions – Scope 1, 2, and 3 – is the initial step. Once this is done, companies can form targeted strategies to tackle the most significant areas of emissions, often within their supplier networks. Interestingly, Julia mentioned that about 50% of companies are still at the starting line of their decarbonization journey. These companies have yet to measure, report, or even set targets for their carbon footprint.

And the path to setting Scope 3 targets is not linear or easy. It requires deep introspection, understanding a company’s operations, and recognizing the challenges and opportunities that lie ahead. However, Julia points out that this is not just a task but a discovery exercise. From manufacturing giants to nimble software startups, the journey varies, highlighting the importance of tailoring approaches based on industry and company size.
 

Toward a Sustainable Future

In a nutshell, while the journey of decarbonization seems long and complex, it's essential to start somewhere. Julia’s advice? “If you can't run, you should walk. If you can't walk, you should crawl. But whatever you do, you should be moving forward on this journey.”

Sustainable future may be within our reach but it’s a collaborative effort that requires businesses to be proactive, measure their carbon footprints, set targets, and continuously strive for improvement. And this is where the EcoVadis Carbon Solution comes in. A recent addition to the EcoVadis product suite managed by Julia, is designed to support global brands in their sustainability journey. Since its launch, over 200 major brands have partnered with EcoVadis to engage their suppliers in climate action.
 

The Challenge of Assessing Supplier Maturity 

It’s vital to note that assessing a supplier's carbon maturity is no easy task as it typically requires gathering a plethora of data directly from them. As a result, companies often overestimate their suppliers' progress in the decarbonization journey. Plus, suppliers today are inundated with sustainability-related requests, including carbon data. Julia affirms that “engagement fatigue” is indeed a concern. 

EcoVadis, however, employs a standard management system approach. This involves continuous data collection, tracking targets, actionable steps toward these targets, and efficient reporting systems. And to alleviate “engagement fatigue”, it prioritizes the value provided to suppliers. In fact, as Julia points out, the fact that suppliers are able to share their carbon data with multiple buyers, using a single response, has been a game-changer.
 

Scaling Carbon Data Collection

With some companies dealing with thousands of suppliers, obtaining consistent and accurate carbon data is a formidable challenge. Emphasizing the importance of scale, Julia underlined how interconnectedness across the supply chain is crucial. Corporates understand the instrumental role their suppliers play in their decarbonization strategy. Hence, technology that can scale up to match this need is paramount.

EcoVadis' Carbon Action Module and the Power of the Carbon Heatmap

EcoVadis’ is Carbon Action Module helps buying organizations as well as suppliers by providing two distinct scorecards: a sustainability scorecard and a carbon scorecard. These provide a comprehensive view of a company's management system, shedding light on targets, actions, and reporting practices related to GHG emissions.

Many companies grapple with identifying which suppliers to prioritize for their carbon engagement. Enter EcoVadis' Carbon Heatmap. This tool uses a vast database to automate carbon hotspot mapping, enabling companies to rapidly identify and engage high-risk suppliers.

Selecting Suppliers – A Delicate Balance

Engaging with familiar suppliers may seem like a logical choice, given the established relationships. But Julia stresses it’s important to go beyond familiarity. Companies must consider the volume of spend associated with each supplier, as this often indicates the depth of the relationship and influence.

Plus, it's not enough for companies to just set their targets. To make a significant impact, companies must engage with their suppliers to ensure these targets trickle down the supply chain. Julia emphasized three key asks companies have for their suppliers:

  • Set a baseline: Understand and measure emissions.
  • Align with science: Setting targets that are rooted in science.
  • Adopt renewable energy: As a key step in the decarbonization journey.

Different suppliers might be at various stages of their sustainability journey. For some, it might just be about setting a baseline, while others might be ready to adopt renewable energy sources. Recognizing this diversity and tailoring the approach is vital.

Understanding the Science-Based Target Initiative

Any discussion tackling decarbonization wouldn’t be complete without the mention of science-based targets and Julia emphasized the prominence of the science-based target initiative as the guiding star for companies. With its eight-year history, it's now seen as the global standard for companies setting their Scope 1, 2, and 3 targets. At the time of writing, over 2,000 companies have adopted science-based targets and are actively tracking and reporting their progress. At EcoVadis we have also recently completed our own science-based target, we've set our own science-based targets. It's been quite an undertaking and through the process, we've learned a lot about our operations, about the opportunities that we have and about the potential challenges we will be facing in the future.

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