Supply chain News and trends

Net Zero: Targets, Goals Objectives and the Start of the Decarbonization Journey

Carlsberg did its first global Scope3 emissions assessments over a decade ago with the first attempt to analyze the impact of the company's and its suppliers' fuel and energy usage. But it wasn't until 2017 that the Group launched its sustainability program Together Towards ZERO, which introduced a more professional approach to Scope 3 management with consistent measurements and understanding what had to be done in order to reduce emissions. 

Via EcoVadis

With regulators, investors and customers demanding cleaner business processes, companies understand the need to improve, but can find it daunting to start measuring all the ways they emit carbon. Organizations must understand Scope 1, 2 & 3 emissions, address ESG issues (environmental, social, governance) and get to grips with terms like “carbon-neutral” or “net-zero” and how they apply to their business operations and strategic objectives.

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Echo Environmental’s technology breaks wires down into raw materials that can be reused and resold, reducing landfill waste.

Comcast has committed to be carbon neutral by 2035 in Scope 1 and 2 emissions across the company’s entire global operations. Recycling the coax cable is a major step step towards addressing scope 3 emissions and Comcast’s broader environment goals. Coaxial cables include multi-layered cords with a steel inner conductor, insulating layer, and conductive shielding, as well as 27 different polymers requiring separation for use in new products.

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Owing to its vast Scope 3 footprint, the retail industry at large accounts for over 25% of global emissions and 40% of the global plastic usage. Wary of the situation, and faced with consumer and legislation-induced pressure, the retail industry is starting to act.

An Oxford Economics study showed that 52% of the organizations had commenced sourcing sustainable materials for product manufacturing or merchandising, and 62% claim to have sustainability plans in place. And yet, just under 20% of the retailers are on course to curb their emissions and prevent the rise in global temperatures (of no more than a 1.5⁰C).

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Alan Holland, chief executive officer of Keelvar, describes the challenge of measuring the carbon emissions of suppliers in multi-tier global supply chains.

As defined by the Greenhouse Gas Protocol, Scope 3 emissions are those emanating from a company’s suppliers — in other words, those that lie outside the control of the original equipment manufacturer. Scope 3 emissions “are inherently more difficult to measure and control, because they’re not coming out of your factories,” says Holland. Sources include producers of components and raw materials, as well as transportation providers.

Growing awareness of the importance of measuring Scope 3 emissions has major implications for sourcing and procurement. For businesses with manufacturing supply chains, Scope 3 emissions can account for between 65% and 90% of total emissions, notes Holland. “It’s imperative that companies get a handle on this.”

The measuring of Scope 3 emissions must become an integral part of the supplier selection process. “Procurement is very much on the front line now,” says Holland. By making emissions a criterion for selection, OEMs can realize dramatic reductions in overall carbon emissions.

Via EcoVadis

With corporate social responsibility (CSR) seeing the largest increase of any CPO priority between 2019 and 2021 (Deloitte 2021) and more than half of FTSE100 companies committing to carbon neutrality in 2021 (Ecoact 2021), it doesn’t need to be sold that sustainability in procurement is no longer a "nice to have" feature.

Some of the key reasons why companies are increasing their sustainability focus are reaching set targets, complying with customer and other stakeholder demands, improving supply chain transparency, and mitigating environmental impact, particularly emissions.

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