SupplyChainTalk: From data to action – harnessing supply chain insights for climate progress

Views on news 

More than 80 percent of Europe’s companies will be freed from environmental reporting obligations after EU institutions reached a deal on a proposal to cut green rules on Monday.  The deal is a major legislative victory for European Commission President Ursula von der Leyen in her push to cut red tape for business, one of the defining missions of her second term in office.

 

The aim of the red tape cuts is to boost the competitiveness of European businesses and drive economic growth. The roll-back of the legislation may be good news for competitiveness but bad for environmental sustainability. However, companies with established sustainability practices can reap the benefits of their preparedness as USPs. The regulation, however, will continue to apply to large companies. 

 

Why cooperation is key to improving sustainability 

Scope three emissions reporting is about quality not quantity and collaboration with suppliers is key to its success. The first step is understanding and measuring the business’s carbon footprint and finding the areas where efforts to reduce it can make the biggest impact. To avoid overwhelming suppliers with various reporting templates on different platforms (EcoVadis, Sedex), standardisation is paramount. Incentives for suppliers to make their operations more sustainable can include promotions or offering them additional business, increased shelf space or opportunities to join partnerships where business and supplier can work together while improving their brand reputation too.

 

Suppliers should also be made aware of cost saving opportunities through improving sustainability – green energy may cost them less, lightweighting their products can also save them money or they may get tax credits for investing in green technology. Energise, a programme by Schneider Electric invited suppliers to sign up for free to get access to training on carbon reduction. Suppliers could also put forward their energy demands, which could be pulled towards long-term power purchase agreements to reach better price competitiveness.

 

Amfori’s BEPI – BSCI’s , the social program’s little brother for the environment – helps members collect data from their suppliers by offering them capacity building services and toolkits. Enhancing cooperation between buyers and suppliers is always easier than between suppliers, who are often competitors to each other.

 

There are components in a business’s carbon footprint that lie beyond its control – which can be pushed back to the 2030s and 2040s, while changes to packaging, moving from air to rail are low hanging fruits. A platform such as Amfori can also help suppliers gain visibility into their energy mix and help them increase the percentage of renewables.

 

The panel’s advice 

• Celebrate progress with suppliers.
• Not all sustainability efforts are about huge investments. Small energy savings – introducing green vehicles into your fleet or switching from road to rail – can also add up.
• Get closer to your key suppliers – identify where you cause them more waste or an increased amount of carbon emissions and listen to their suggestions regarding what changes you should make to decrease them.
• Make a commitment to a science-based target for a start.