SBTi, in partnership with Anthesis and other stakeholders, has released guidance for Supplier Engagement. What does it mean for your decarbonisation and supply chain initiatives?
Anthesis is thrilled with the release of SBTi’s newest guidance on Supplier Engagement, developed in collaboration with our team and other sustainability experts. With supply chain emissions accounting for an average of 11.4x operational emissions for most companies, this guidance represents a major milestone for organizations in the pursuit of a net-zero target. It offers a comprehensive roadmap to navigate the tactical complexities of working with suppliers and empowers every company to take control of their supply chain footprint.
What is Supplier Engagement, and why does it matter?
Supplier Engagement plays a crucial role in reducing Scope 3 emissions, which not only pose the greatest challenge but can also have the most significant impact for organisations. It entails utilizing a set of tools and methods to actively involve and collaborate with your supply chain in driving sustainable practices and initiatives. These may include initiatives related to holistic responsible sourcing practices, such as: human rights, GHG inventory disclosures, emissions reductions targets, and more. In the context of SBTi, Supplier Engagement involves a specific criterion: a designated percentage of an organization’s suppliers will set an SBTi-aligned emissions-reduction target within five years. While on the surface this appears simple, effective implementation takes thoughtful consideration and planning.
What is the new SBT Supplier Engagement guidance?
SBTi has listed Supplier Engagement as a near-term target available to organisations whose Scope 3 emissions accounted for more than 40% of their overall impact. However, the approach to implementing this target varies across organizations, with differences in processes, stakeholder selection, and execution. SBTi’s new guidance now equips organizations with the necessary tools, tactics, and processes to engage suppliers in a manner that enables aligned emissions reductions. These include:
- Choosing the right suppliers to engage with the proper target: assessment methodology for Scope 3, supplier selection, and SBT criteria review
- Securing internal buy-in: how to determine critical stakeholders, frame the initiative and ensure buy-in
- Implementing a supplier engagement target: defining roles & responsibilities and implementing an engagement and data collection system
- Enabling and tracking supplier performance: providing suppliers necessary tools & resources, developing incentive structures and refining the program
- Monitoring and reporting progress against the target: ongoing reporting on an annual basis
How can your organisation get started?
As a first step in the reduction journey, it is recommended to conduct a comprehensive GHG Inventory – by spend or by activity. By doing so, organizations can evaluate the actual impact of their supply chain, as well as identify hot spots across their supply chain.
How does the new guidance impact your supply chain initiatives?
Supplier Engagement is a critical piece to an organisation’s Net Zero journey. It will require detailed data collection from relevant suppliers and buy in from ESG/sustainability, leadership, procurement and accounting teams to be effective.
For organisations that regularly engage with suppliers to manage compliance, build rapport, or drive other supply chain initiatives, a Supplier Engagement target presents an opportunity to build upon existing workstreams and relationships. Often, the most effective engagement system is the one that already exists. To maximise effectiveness, this entails adopting a unified approach to suppliers across all supply chain initiatives, from procurement to leadership.
For organizations that rarely engage suppliers, a Supplier Engagement SBTi-aligned target presents the opportunity to de-risk your supply chain by engaging with critical suppliers and building relationships while still reducing your overall emissions. By establishing an engagement pathway, organizations can also implement other risk mitigation strategies, such as social and financial impact reduction.
How can Anthesis help?
As the Sustainability Activator, Anthesis empowers clients on their sustainability journey by providing support, guidance, and boots-on-the-ground work. With a global team of 1250+ sustainability experts, we have provided organisations with the support they need to get started, adopt best practices, and continue maturing their sustainability efforts. Our experts are here to help organizations develop sustainability strategies, conduct GHG inventories, set SBTi and supplier engagement targets, implement supplier engagement strategies and provide reporting services.
We work with our clients and their suppliers to strengthen buyer-supplier relationships, improve supplier engagement processes, and identify where support is needed to accelerate Scope 3 decarbonisation. We look forward to extending the same level of support to you and companies seeking to drive impact throughout their supply chain.