New Guide Helps Firms Cut Supply Chain Emissions

A new guide published by CDP, Ceres, and the We Mean Business Coalition is providing businesses with a pragmatic way to address one of their greatest climate challenges—decarbonizing supply chains. The guide, entitled "Supplier Engagement Guidance: A 7-Step Approach for Accelerating Decarbonization," is intended to assist organizations in addressing Scope 3 emissions, which tend to account for the largest portion of a company's carbon footprint.

Scope 3 emissions are those indirectly created throughout the value chain, such as suppliers, logistics, and product use. For most companies, these emissions represent more than 70% of their overall greenhouse gas footprint. Although they are large, Scope 3 emissions tend to be the most challenging to monitor and lower, primarily because they are outside of a company's direct control. Acknowledging this problem, the new guide sets out a strategic, action-focused approach that places supplier engagement at the heart of climate action.

The 7-step methodology starts by evaluating the supply chain emissions footprint, which is an enabling step that enables organizations to know their Scope 3 emissions magnitude and source. It then proceeds towards establishing precise targets for supplier engagement and emissions reductions. Prioritization of suppliers not only on the basis of emissions, but also on the basis of preparedness and capability to act on climate, is highlighted in the guide.

Aligning internal company frameworks is yet another essential step in the process. The guidance suggests creating internal governance and incentive frameworks favorable to supplier engagement objectives, with procurement teams and sustainability initiatives working together in harmony. This alignment is essential to embedding climate factors in procurement decisions, making sustainability a fundamental decision factor.

The crux of the guide is in the fifth and sixth steps: collaborating with suppliers based on clear expectations, and assisting them with tools, training, and financing solutions. Suppliers are frequently lacking in resources and information when addressing climate action. By equipping them with digital technologies, emissions management platforms, and financial incentives, companies are able to empower their partners to count, control, and minimize their own carbon emissions.

Monitoring progress and being transparent make up the last step in the 7-step process. The guide calls for firms to report progress regularly, with standard metrics and platforms. Being transparent not only makes companies more credible but also allows them to streamline their strategies and become better with time.

The guide is not only theoretical. It is supplemented with actual case studies of leading global businesses such as HP Inc., PepsiCo, and Unilever. These examples are proof points that supplier engagement, when executed correctly, results in quantifiable climate impact.

HP Inc., for instance, has introduced a strategy involving financially rewarding suppliers who prove to show emissions reductions. This not only encourages sustainable practice but also fortifies long-term relationships with suppliers. PepsiCo, on its part, has incorporated sustainability in its procurement operations through supplier scorecards, which allow the company to make data-driven decisions from a climate performance perspective. Unilever, on the other hand, provides digital platforms that walk suppliers through the emissions tracking and reporting process, allowing them to meet global climate goals.

The report points out that today's climate leadership demands that firms extend beyond their own operations. It urges firms to make the engagement of suppliers mission-critical, not secondary. With shareholder pressure building and regulatory requirements increasingly stringent, firms can no longer ignore their supply chains in climate planning.

By integrating supplier involvement into business core operations, firms not only lower emissions, but they also improve resilience, innovation, and competitiveness in a low-carbon economy. The 7-step roadmap, supported by real-world tools and cases, offers much-needed guidance for firms willing to take the lead toward a net-zero future.