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Data insights to lowering supply chain emissions and reaching net zero

Get the right data to reliably meet your ESG goals including lowering Scope 3 emissions and meeting Net Zero targets

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The climate crisis is reshaping business as usual. Nearly 90% of S&P 500 companies acknowledge climate change as a potential risk in their SEC filings, and supply chains are the most significant source of emissions.

CDP reports that, on average, supply chain emissions are 11.4 times higher than a company’s direct operational emissions. This staggering figure underscores the need for procurement teams to understand and address the environmental impact of their suppliers. But the challenge lies in unraveling the complexities of climate data to make informed, sustainable procurement decisions.

CDP Disclosures: The gold standard for climate transparency

That’s where supplier insights, particularly those derived from primary emissions data become invaluable. CDP, a global non-profit, operates the world’s leading environmental disclosure system, setting the gold standard for corporate environmental transparency. Thousands of companies voluntarily report their climate-related data through CDP, providing a wealth of information that is essential for sustainable procurement.

By analyzing this data, you can overcome the challenges of:

  • Data Gaps: Aggregated global emissions data from CDP helps fill in critical data gaps, providing information that may not be readily available through other sources.
  • Inconsistent Reporting: CDP’s standardized framework ensures that climate data is reported consistently, making it easier to compare the performance of different suppliers.
  • Limited Resources: Accessing and analyzing aggregated CDP and other climate-related data through platforms like Supplier.io can save you valuable time and resources.

Overcoming Data Challenges: What can climate data reveal?

The right level of climate data offers a wealth of insights into a company’s environmental impact and commitment to sustainability. Understanding supplier’s emissions and targets is crucial for procurement teams seeking to build a resilient and low-carbon supply chain. Here’s an overview of key metrics:

  • Scope 1,2, 3 Emissions Data: Emissions data from CDP disclosures provide detailed breakdowns of Scope 1, 2, and 3 emissions, offering a granular view of suppliers’ carbon footprints and pinpointing the most significant sources of emissions.
  • Science-Based Targets (SBTs): Identifying suppliers who have committed to ambitious, science-based emissions reduction targets is critical. The Science Based Targets initiative (SBTi) reports that companies with SBTs achieve significant emissions reductions, averaging an annual reduction rate of 8.8%. Partnering with suppliers aligned with SBTs not only mitigates risk but also positions your company as a leader in the transition to a low-carbon economy.
  • Carbon Intensity: Carbon intensity is the amount of greenhouse gas (GHG) emissions a company produces per unit of revenue. It’s a powerful indicator of a company’s efficiency in managing its carbon footprint relative to its economic output. Why is carbon intensity so crucial for sustainable procurement analysis of suppliers?
    • Benchmarking Sustainability Performance: Carbon intensity allows you to compare the environmental efficiency of different suppliers. By benchmarking suppliers against industry peers and best practices, you can quickly identify leaders and laggards, helping you make more informed decisions about who to partner with.
    • Identifying Improvement Opportunities: A high carbon intensity may signal inefficiencies in a supplier’s operations or reliance on carbon-intensive energy sources. By engaging with these suppliers, you can encourage them to adopt more sustainable practices and technologies, ultimately reducing emissions across your supply chain.
    • Measuring Progress: Tracking a supplier’s carbon intensity over time provides a clear indicator of their progress in decarbonizing their operations. This allows you to assess the effectiveness of your engagement efforts and identify areas where further collaboration is needed.

Carbon intensity is a key piece of the puzzle in building a more sustainable supply chain.

Driving climate action through data-driven decisions

Leveraging this level of climate data empowers procurement teams to take proactive steps in mitigating environmental impact and building a more sustainable supply chain:

  • Identify High-Impact Suppliers: Armed with granular emissions data, you can engage in targeted, meaningful conversations with suppliers. Highlighting specific areas for improvement, setting joint reduction goals, and even collaborating on innovative solutions become possible when you have a clear understanding of the data.
  • Mitigate Supply Chain Risks: By understanding your suppliers’ climate-related risk, you can anticipate disruptions, diversify your supply base, and create contingency plans that safeguard your operations.
  • Build Stronger Partnerships: Collaborate with suppliers on emissions reduction initiatives, fostering a shared commitment to sustainability. This strengthens your collective impact and accelerates the transition to a low-carbon economy.
  • Choose Sustainable Suppliers: Choosing sustainable suppliers, especially those with a proven track record of emissions reduction and a commitment to science-based targets, can not only mitigate risks and enhance your brand reputation, but also unlock new, potentially more cost-effective sourcing opportunities that align with your company’s sustainability goals.

Centralized access to comprehensive climate data, sourced from repositories like CDP disclosures, the Science Based Targets initiative (SBTi), and other reputable providers, can streamlines the decision-making process and quips you with the information needed to strategically engage with suppliers, reduce Scope 3 emissions, and advance you company’s net-zero goals.

Emissions data from CDP disclosures available in Supplier.io platform

Emissions data from CDP disclosures, alongside science-based targets and carbon intensity, are available on Supplier.io’s platform. These climate-related insights can help you make informed procurement decisions that align with your organization’s climate goals as pressure mounts to reduce Scope 3 emissions and achieve net-zero. 

Read the press release, CDP and Supplier.io Partner to Improve Supply Chain Sustainability

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