Decarbonization: a relay race that’s also won with suppliers
Even before delivering a single unit of products, an industrial company’s carbon footprint is heavily loaded by the carbon footprint of materials, items, components, equipment, services, and other inputs required for its operations. This is the “upstream scope 3” of carbon emissions, on which companies are evaluated as much as their own operational emissions (scopes 1 and 2). This is particularly problematic because, on average, the supply chain of most companies emits significantly more emissions than their direct activities do – 11.4 times more, according to a CDP/BCG report.
As scope 3 is by definition beyond their borders, companies face two major challenges:
- Reliably assessing their emissions within this scope: In 2021, only 9% of the industrial companies surveyed by BCG could comprehensively measure scope 3 emissions.
- Activating the levers that encourage their suppliers to initiate or accelerate decarbonization efforts.
The initial reflex is to turn to suppliers by tightening specifications and requirements in procurement processes, assuming that finding solutions to reduce their carbon footprint is their responsibility.
However, this approach may quickly reach its limits, as regulatory objectives do not necessarily encompass all possible levers (especially those related to consolidation and operational optimizations). A significant portion of the potential benefits remains “hidden.”
To fully exploit these potentials and reap all the benefits, the winning strategy is co-construction. It involves proactively engaging in a collaborative approach with “critical” suppliers:
- Working together on respective “client-supplier” practices and constraints to identify areas where they can align with the “right need” – consuming less energy and emitting less carbon on both sides – and finding broader benefits in redesigning certain components or processes.
- Sharing best practices to enhance the capabilities of less advanced suppliers and accelerate their progress.
- Collaboratively innovating on decarbonization and identifying levers for operational performance, cost reduction, and market differentiation that go well beyond carbon footprint.
To support companies in these win-win strategies, Mews Partners and Brainergies have combined their expertise in data systems, operational excellence, and stakeholder engagement in decarbonization journeys.
This is the “Low Carb’on-boarding” offering: a pragmatic and tool-supported approach based on five “keys”:
- Key #1: Adopt a segmented approach based on supplier typology.
- Key #2: Establish a reliable measurement of scope 3 emissions.
- Key #3: Rethink internal practices to fully integrate the CO2 dimension into every department of the company.
- Key #4: Develop a collaborative approach with strategic suppliers.
- Key #5: Foster the supplier community.
In collaboration with
