Develop a low carbon supply chain | Build your business's reputation
Is your supply chain low carbon? Ask your suppliers to provide you with their green credentials so you can check.
The pandemic will have undoubtedly strengthened many supply chains, given how important they've been in supporting company resilience. But a company's ambition to become low carbon is significantly affected by the carbon used, or generated, by their supply chain. Many organisations are making their COVID-19 recovery packages favour low carbon businesses or suppliers, in the aim to 'build back better' based on low carbon and green strategies. It's also worth noting that consumers are becoming increasingly interested in the green credentials of a business, so you really should engage your supply chain on this important issue.
Key questions for suppliers should be:
- What fuel and resources are used within their transport and logistics operations?
- What fuel is used within their buildings?
- What fuel and resources are used in any of their supplier processes?
These reflect how companies report on their emissions, based on scope 1-3:
Scope 1 - A company's direct emissions of greenhouse gases, i.e. processes that are under their control, like fleet and operational fuel combustion, and gas boiler emissions.
Scope 2 - A company's indirect emissions from the generation of purchased energy, electricity and gas - this is why switching to renewable energy providers is such a simple way of supporting the decarbonisation of energy.
Scope 3 - A company's indirect emissions based on activities that are not within their control, i.e. waste processes, water, travel and procurement.
Businesses are increasingly being asked to focus on all three areas of emissions on the journey to net zero. There are likely to be carbon taxes, subsidies for early adopters of new approaches/technologies, restrictions through legislation, as well as public disclosure of each company's carbon footprint.
If suppliers are not addressing their impact in context of scopes 1-3 then there should be a review and a move to procure from organisations that are offering low carbon solutions. And when reviewing contracts from suppliers, it is important to include within new agreements the supply of reports and measurements of carbon emissions, carbon targets to be achieved, and use of innovation etc.
There are a number of organistions that can help support the above process, from outsourcing professionals to online carbon calculators.