The 1.5°C
Supplier
Engagement
Guide

The 1.5°C Supplier Engagement Guide is a freely accessible guide for companies seeking to reduce greenhouse gas emissions in their supply chains.

why act now?

Emissions Must Drastically Reduce. To achieve the 1.5°C goal set out in the Paris Agreement, greenhouse gas (GHG) emissions must immediately and drastically reduce, halving before 2030 and reaching net zero by 2050, while at the same time removing some of the carbon already emitted.

Business Action is Crucial. All companies need to publicly set and implement targets to reduce GHG emissions across their full value chain, in line with the latest climate science of the IPCC. Given that the vast majority of companies’ emissions are in their value chains, engagement with suppliers is crucial to progress.

Climate Action is Good Business. Companies that make progress more quickly will not only accelerate the needed transition but can also create significant competitive advantage and enhance their own long-term resilience.

Ambition

The 1.5°C Supplier Engagement Guide (SEG) specifically addresses one critical component of supply chain decarbonization: engaging suppliers to take climate action.

The guide provides practical guidance that any company can utilize to work with suppliers to set and implement a 1.5°C-aligned target and move to action. The 1.5°C SEG suggests a structure to harmonize buyers’ requirements and simplify supplier engagement on climate. It provides leading practices and frameworks for supplier engagement, and is aligned with SBTi’ s Supplier Engagement Guidance.

Does the 1.5°C SEG address all supply chain issues?

The guide does not address all environmental sustainability – or even climate – issues but focuses on key areas that each company should consider for effective implementation of supplier engagement.

Are suggested actions applicable to all suppliers and supply chains?

As all supply chains are different, companies should select those actions most appropriate for their business and suppliers.

Individual suppliers will each face their own challenges and opportunities – based upon sector, geography, maturity, or other factors. Some may require additional support or innovative solutions to deliver their emissions reductions, while others may be well positioned to act faster and should be incentivized and supported to do so.

How to use

This interactive 1.5 °C Supplier Engagement Guide is available for any business to use. Companies are encouraged to review the Ambition of the Guide before diving in.

The 1.5°C SEG is structured in 4 blocks, each with 3 recommendations, and a transversal fifth block. Its primary audiences are company functions which work with suppliers and/or on decarbonization, such as: procurement, supply chain engagement and/or sustainability teams.

Companies will have different starting points depending on their maturity, internal preferences and the shape and complexity of their supply chains. Therefore, companies can begin to dive into whichever block and recommendations that are the most relevant and feasible.

While the 1.5°C Supplier Engagement Guide provides a common framework, companies should adapt it as fitting for each supplier, while always aligning with a 1.5°C degree pathway.

Each recommendation comes with an explanatory “Why”, “What”, and “How”, and a list of resources.

  • The “Why” explains in what ways the recommendation connects to supply chain decarbonization to halve GHG emissions by 2030, as well as the benefits of implementing the recommendation.
  • The “What” is a brief description of the recommendation.
  • The “How” includes practical steps to implement the recommendation.
  • The linked resources provide examples and templates companies are welcome to adapt and use to support their climate journey.

guide framework

This guide is based on best practice from the world leaders and aligned with UN Race to Zero.

Foundation

  • Internal Buy-in and management Commitment
  • Suppliers Engagement Targets
  • Supply Chain GHG Mapping

Procurement

  • Expectation
  • Process Integration
  • Internal Alignment and Operationalization

Supplier
Engagement

  • Dialogue
  • Support
  • Recognition

Reporting

  • Suppliers’ Progress Reporting
  • Management of Suppliers’ Performance Data
  • Company Progress Reporting

Collaboration & Innovation

Collaboration and innovation can help companies identify new solutions, contribute to systemic approaches towards decarbonized supply chains in partnership with stakeholders, as well as accelerate work across the other 4 building blocks.

1 Foundation

Management Commitment

Explore recommendations and examples on how to secure internal buy-in by clicking on each tab below.

Why

Clear management support from the start as well as a defined structure of responsibilities enable effective implementation of your goal internally with suppliers.

 

What
  • Secure management commitment to work with suppliers to halve their GHG emissions before 2030.
  • Define clear internal responsibilities to achieve this goal and align departments and processes with the company’s climate goals.
  • Assign clear responsibilities, identify potential actions, and clarify implications for each department or function.
How
  • Seek top management’s commitment to working with suppliers to halve their GHG emissions before 2030 to ensure support and commitment at the highest levels of leadership.
  • Have management facilitate alignment on climate strategy with relevant departments, such as sourcing, indirect procurement, R&D, compliance/legal, product, and finance, to help set expectations and bolster accountability.
  • Assign clear responsibilities, identify potential actions, and clarify implications for each department or function. Potential departmental actions:
    • Finance: Consider how to support suppliers’ transition needs through finance, such as pre-payment, supporting green loans via sustainable supply chain finance, or similar.
    • Public Affairs: Lobby and advocate for strong climate policy.
    • Procurement: Support supplier training and accountability.
    • Audit: Include climate considerations as part of supplier auditing.
Examples
  • Telia Sustainability Strategy Updates

    include examples of supplier communication.

    Read more
  • Mars Net Zero Roadmap

    draws on five fundamental elements to reach net zero.

    Read more
  • Apple's Supplier Clean Energy Program

    is part of its commitment to be fully carbon neutral by 2030.

    Read more
  • Ragn-Sells' Supplier Circle Example

    gives an overview of climate approach and policy.

    Read more
  • Unilever's Climate Transition Action Plan

    outlines climate commitments and plans to achieve them.

    Read more

1.5°C Suppliers Target

Explore recommendations and examples on how to set a supplier engagement target by clicking on each tab below.

Why

Publicly stating your supplier engagement target and working directly with priority suppliers communicates to stakeholders – including suppliers – your company’s ambition to align its procurement with climate science.

 

What
  • Set and publicly state the goal to engage with suppliers to halve their GHG emissions before 2030.
  • Communicate your target to suppliers, prioritizing which suppliers to engage with directly for maximum impact, and which to direct to publicly available tools and resources like the SME Climate Hub (for small and medium sized suppliers).
How
  • Set your target and craft a plan to achieve it. The target should include requesting suppliers to set science-aligned Scope 1 and 2 emissions reduction targets, and a Scope 3 target if these emissions are greater than 40% of their total).
    Possible target metrics:

    • % or number of strategic suppliers (e.g., by spend or invested value) to set science-aligned targets by a given year.
    • Reducing supplier GHG emissions by a specified percentage by a given target year.
  • Publicly state your supplier engagement target.
  • Include interim goals in the run up to 2030 to facilitate progress.
Examples
  • Telia CO2 Level System for Suppliers

    evaluates the CO2 reduction performance of suppliers.

    Read more
  • Unilever: Climate Promise Announcement

    is inviting suppliers to take ambitious climate action.

    Read more
  • Unilever: Working with Suppliers on Climate Action

    is inviting suppliers to commit to their Climate Promise.

    Read more

Supply Chain GHG Mapping

Explore recommendations and examples on how to calculate supply chain emissions by clicking on each tab below.

Why

Calculating Scope 3 emissions identifies hotspots and GHG reduction potential across the supply chain, informing where supplier engagement is likely to yield the greatest impact, therefore allowing companies to use limited resources most effectively.

What
  • Perform a full Scope 3 emissions inventory based on the Corporate Value Chain (Scope 3) Standard.
  • Understand the main GHG hotspots across your supply chain, the GHG reduction potential, suppliers’ maturities, and buyer leverage.
  • Prioritize which suppliers to engage with directly for maximum impact, and which to direct at publicly available tools and sources like the SME Climate Hub (for small and medium sized suppliers).
    • Decision criteria for prioritization may include suppliers’ risk exposure, strategic importance, or maturity in decarbonization.
How
  • Conduct a full Scope 3 emissions inventory to understand where the largest GHG emissions sources are located within your entire supply chain, including of tiers 2, 3, and beyond.
  • Identify which suppliers to include in your supplier engagement target, typically by ranking suppliers according to their portion of your total Scope 3 emissions but sometimes also by geography or product category.
  • Prioritize which suppliers to engage with directly, using criteria such as emissions volume, emissions reduction potential, readiness of suppliers to engage, strength of relationship with suppliers, strategic status of suppliers, suppliers’ emissions maturity, and suppliers’ risk levels.
    • Direct engagement with selected suppliers can help facilitate climate action and focus resources where they are likely to make the biggest impact.
    • Support can be provided to other suppliers through connections to publicly available resources, like the SME Climate Hub (for small and medium sized suppliers) or SBTi (1.5°C goal set out in the Paris).
Examples
  • Unilever's Climate Transition Action Plan

    underlines the importance of engaging suppliers in climate action.

    Read more
  • Ericsson's Emissions Mapping Table

    Overview of emissions impact mapped per category.

    Read more
  • Telefónica Supply Chain Climate Target

    includes the supplier engagement program and resources for suppliers.

    Read more

2 Procurement

Expectation

Explore recommendations and examples on how to align buyer expectations with suppliers by clicking on each tab below.

Why

Communicating clear expectations to suppliers encourages them to set targets and take action. Expectations should be communicated from your top management to your suppliers’ top management to strengthen the message; and from procurement to sales/key accounts to make them actionable through the relevant business channel. Joining forces with other buyers through 1.5°C-aligned procurement pledges sends and strengthens a unified message, providing an additional incentive for suppliers to act.

What
  • Provide a clear ask from top management and procurement- for all suppliers to set a science-aligned emissions reduction target within a 5-year timeframe.
  • Align your ask with other buyers to send a unified message to suppliers about the need to halve emissions before 2030.
How
  • Communicate requirements for suppliers from your company top management (e.g. CEO) to suppliers’ top management, and from your procurement team to suppliers’ key account team.
  • Expectations should be clearly communicated to suppliers, but can take many forms, according to each company setting. For example:
  • Communicate to suppliers what resources are available to support them in taking climate action.
  • Support the cascading of climate action in your supply chain by asking suppliers to engage their Tier 1 suppliers on climate action.
Examples
  • BT Group Supplier Letter

    includes supplier expectations, and resources to support suppliers' transition.

    Read more
  • BT Group Climate Change Standards & Requirements

    outlines BT's expectations on climate action.

    Read more
  • The Supplier Cascade

    provides practical guidance on how expectations to decarbonize can be effectively communicated through all supply chain tiers.

    Read more
  • A General Supplier Letter Template for 1.5°C Ambition

    is based on best practices from 1.5°C Supply Chain Leaders.

    Read more
  • Unilever Climate Programme Event Highlights - Video

    summarizes the highlights of Unilever's Climate program event.

    Read more
  • IKEA IWAY Standard

    outlines and explains IKEA's standards and rationale for their supplier expectations.

    Read more
  • Unilever Climate Programme - Video

    is supplementing Unilever's letter to inform its 300 most impactful suppliers of their climate programme.

    Read more
  • Unilever Climate Programme - Letter

    informs its 300 most impactful suppliers of their climate programme.

    Read more
  • Telefónica's Invitation to Supplier Engagement Program

    is designed to support suppliers in their decarbonization.

    Read more
  • Telia's Company Supplier Code of Conduct

    lay out how to engage with stakeholders.

    Read more
  • Unilever Climate Program Launch

    at a virtual event to support suppliers on their climate journey.

    Read more
  • Telefónica's Supply Chain Sustainability Policy

    provides an overview supplier expectations.

    Read more

Process Integration

Explore recommendations and examples on how to integrate the decarbonization process into existing procurement practices by clicking on each tab below.

Why

Integrating your expectations to halve emissions before 2030 into procurement documents and processes aligns buying and climate goals. Integrating climate metrics and considerations into existing procurement processes incorporates climate action into day-to-day operations.

What
  • Modify key procurement templates and processes to require suppliers to reduce emissions.
  • Include emissions considerations in tendering and the evaluation of new suppliers, as well as in the renewal of contracts with existing suppliers.
  • Devise a plan to integrate climate action into your existing supplier base.
How
  • Include text in key procurement documents requiring suppliers to reduce emissions and report on  their progress in line with recognized standards (e.g. GHG Protocol). Examples include:
    • New supplier contracts
    • Supplier Code of Conduct
    • RFI/RFPs/tendering documents
    • Supplier self-assessments
    • Performance scorecards
  • Ensure that climate considerations are included as a standard part of the information-gathering processes and standard documents provided in your procurement portal.
  • Work with procurement teams to integrate your climate goals into existing supplier relationships, as part of supplier dialogue.
  • Because contractual relationships and suppliers’ maturity levels on climate vary, process integration may require flexibility across different suppliers.
Examples
  • Salesforce Addition of Climate Considerations to Supplier Contracts

    announces the addition of a Sustainability Exhibit to all supplier procurement contracts.

    Read more
  • Salesforce's Sustainability Exhibit

    entails the annual carbon neutrality attestation and emission report.

    Read more
  • Telia's Internal Procurement Guidance for Working with Suppliers

    serves as the basis for conversations between procurement and suppliers.

    Read more
  • Telia's Company Letter to Suppliers

    requests suppliers to join Telia in setting a net zero target.

    Read more
  • TCLP Net Zero Contract Clauses

    provide a set of net-zero aligned contract clauses that companies can leverage throughout their procurement cycle.

    Read more

Operationalization

Explore recommendations and examples on how to secure internal support on supplier decarbonization by clicking on each tab below.

Why

The procurement team plays a critical role in operationalizing your company’s decarbonization efforts through supplier engagement. For this reason, procurement teams should be trained on your company’s decarbonization strategy and the role they play as the key relationship holder with suppliers. Their buy-in and understanding is fundamental. Appropriate internal incentives structures linked to achieving climate goals can strengthen internal buy-in.

What

Build support from the procurement team to contribute to achieving emissions reduction goals:

  • Training procurement staff.
  • Aligning internal incentives for relevant teams.
How
  • Identify the employees who hold relationships with priority suppliers for decarbonization to secure their buy-in and support.
  • Train selected employees on your company’s climate goals, the importance emissions reductions, and the role of procurement in meeting those goals.
  • Consider appropriate incentives linked to climate performance for procurement and sustainability teams. For example, relevant climate KPIs could be integrated into employee review and performance evaluations.
Examples
  • Telia's Internal Procurement Guidance for Working with Suppliers

    clearly states why and how best to work on supplier engagement.

    Read more
  • Microsoft's Carbon Fee for Internal Business Units

    encourages and aligns the business with decarbonization.

    Read more

3 Supplier Engagement

Dialogue

Explore recommendations and examples on how to best communicate with suppliers on decarbonizing by clicking on each tab below.

Why

An open dialogue with suppliers on climate can help buyers understand climate performance, build trust, and identify needs and opportunities.

Integrating climate performance into regular business interactions – rather than setting up a separate process – positions emissions reductions as a central business topic.

What
  • Include climate and emissions reduction goals in ongoing business interactions between procurement and suppliers.
  • Review climate performance alongside other supplier reviews and evaluations.
How
  • If you have not conducted previous buyer-supplier dialogue on climate, start by:
    • Sharing your supplier engagement target and expectations for emissions reductions.
    • Asking suppliers about their existing emissions reductions plans and inquire about support needed.
  • Regularly discuss climate performance with suppliers (e.g. by reviewing supplier scorecard), to follow progress, provide feedback on performance, and identify needs and opportunities, at least annually.
Examples
  • WWF's Example Supplier Questionnaire - Emission Possible

    walks companies through typical questions they may want to consider asking their suppliers when engaging on climate ambitions.

    Read more
  • Ericsson's Slide for Supplier Dialogue Meetings

    is used in buyer-supplier meetings (e.g. business reviews).

    Read more

Support

Explore recommendations and examples on how to best support suppliers with their decarbonization journey by clicking on each tab below.

Why

While some suppliers might already be on track to reduce emissions in line with the 1.5°C goal set out in the Paris Agreement, others might not know where to start. Pointing suppliers to resources and examples can help increase suppliers’ confidence to take climate action and deliver needed emissions reductions more rapidly.

 

What
  • Provide tools and resources that suppliers at different maturity levels can leverage to take action towards reducing their emissions.
  • Offer ad-hoc support where needed.
How
  • Direct suppliers to publicly available tools and guides as appropriate:
    • GHG Accounting methodologies and tools: GHG Protocol.
    • Target-setting methodologies and tools: Science-Based Targets Initiative (SBTi).
    • Strategy setting: 1.5°C Business Playbook.
    • Tools and resources tailored specifically for small- and medium-sized businesses: SME Climate Hub and Climate Fit.
    • Sectorial or geography-specific resources that are relevant for your supply chain, as different types of suppliers have different needs.
    • Link and encourage suppliers to leverage climate commitments in line with the UN Race to Zero to signal public alignment and act faster with other players.
  • Offer ad-hoc support to inexperienced suppliers, such as:
    • Grouped supplier webinar or gatherings.
    • Facilitate access to third-party services.
    • One-on-one support, such as expert sessions to calculate GHG emissions; guidance on metrics and reporting; SBTi target setting, and similar.
    • Assist suppliers in pursuing shared solutions, such as virtual PPAs for all tier 1 suppliers.

 

 

Examples
  • Salesforce Sustainability for Suppliers

    provides information on how Salesforce is working with suppliers on sustainable procurement.

    Read more
  • Telia's Environmental Goals - Focus on Zero CO2

    is used as the basis for internal trainings with procurement teams.

    Read more
  • The Supplier Engagement in Action Report

    by UNGC Denmark and BSR presents Danish examples on Scope 3 reductions.

    Read more
  • Ericsson's Supplier Climate Action Presentation

    shares expectations, offers support, and next steps.

    Read more
  • The Microsoft Hub

    is a provision of free environmental sustainability capacity-building resources open to companies worldwide to help them develop their sustainability roadmaps.

    Read more
  • IKEA's Renewable Electricity Program

    supports suppliers by providing access to financing for suppliers' own RE projects as well as facilitating the purchase of RE from electricity providers (PPAs).

    Read more
  • IKEA's Supplier Sustainability Solutions Booklet

    provides practical advice and guidance for how suppliers can address critical environmental issues.

    Read more

Recognition

Explore recommendations and examples on how to incentivize suppliers to decarbonize by clicking on each tab below.

Why

Utilizing recognition and incentives schemes can complement requirements by further encouraging suppliers to take climate action.

Incentives – both financial and non-financial – can provide a boost to suppliers that are less mature on their decarbonization journey, lack motivation, or simply do not have the right resources to get started. Incentives and recognition can take many forms and can, but need not always, be financial.

What
  • Identify and celebrate progress and good performance.
  • Provide incentives to encourage better performance.
How
  • Define appropriate ways to recognize good supplier climate performance and embed them in the procurement process.
  • Avenues may include:
    • Supplier recognition: recognize supplier climate performance publicly (e.g., through your company’s website) or with peers or host award ceremonies.
    • Preferential conditions linked to climate action: e.g., improved payment terms or locked-in longer contracts linked to climate performance, applying discount factors in contracts linked to progress towards climate targets.
    • Resources for improved business performance: Providing upskilling on new tools or technologies or better payment terms to support upgrading.
    • Direct financing of climate interventions: financially contribute to suppliers’ GHG reduction (e.g. switch to renewable energy in a supplier factory).
    • Leverage better credit rating to facilitate supplier loans.
    • Collective financing with suppliers, e.g., on renewable energy installations.
    • Grouped decarbonization target with supplier.
Examples
  • Walmart's Giga-Guru

    showcases suppliers making decarbonization commitments.

    Read more
  • BMW Group Supplier Awards Ceremony

    is BMW's annual supplier recognition event.

    Read more
  • Telefónica's Recognition Letter

    thanks and congratulates suppliers for good progress on decarbonization.

    Read more
  • Press Release: O2 offers discounted access to renewable energy

    Public statement about O2's partnership.

    Read more

4 Reporting

Suppliers' Progress Reporting

Explore recommendations and examples on how to track the progress of suppliers’ emission reduction by clicking on each tab below.

Why

Suppliers’ disclosure of a target to halve emissions before 2030 signals their intention to align with a 1.5°C goal set out in the Paris Agreement. Yearly reporting on GHG emissions and progress against the targets creates accountability and allows tracking. Disclosing progress publicly allows suppliers to share the same information with all their customers and other stakeholders at the same time.

What
  • Request suppliers to publicly disclose their emissions reductions target and progress annually.
How

Request suppliers to:

  • Set and publicly disclose a target to set a science-aligned emissions reduction target.
  • Publicly report their Scope 1, 2, and 3 emissions on a yearly basis, in line with international standards such as the GHG Protocol or Climate Disclosure Framework for SMEs.
  • Report progress annually through a sustainability report made publicly available on their website.

 

 

Examples
  • SAC Manufacturer Climate Action Program

    was developed with Nike and Target Corp

    Read more
  • Apple's Call on Suppliers

    requires suppliers to report on their emission reduction process

    Read more

Management of Suppliers' Performance Data

Explore recommendations and examples on how to manage supplier data by clicking on each tab below.

Why

Tracking suppliers’ yearly disclosures allows the buying company to assess suppliers’ progress towards their goals, and tracking suppliers’ data enables the company to understand and disclose how targeted efforts with select suppliers contribute to achieving the company’s own climate goals.

Companies can leverage progress indicators in their dialogue with suppliers to help ensure continual progress.

What
  • Define a clear process to track supplier climate performance at least annually, ideally by leveraging publicly reported indicators disclosed by your suppliers.
How
  • Leverage suppliers’ public reporting to track:
    • Existence (or not) of an emissions reductions goal.
    • Yearly GHG emissions and progress toward target.
  • Define responsibility for tracking within your organization. Tracking is sometimes a manual process, but consider opportunities to automate the process with your data management platform in order to minimize errors and simplify.
  • Make information available to procurement teams for their dialogue with suppliers.
  • Note that reporting from suppliers will cover their entire organization’s scope, not just the proportion of emissions directly associated with the production of your products.
Examples
  • IKEA's Supplier Performance Framework

    includes KPIs for evaluating supplier climate performance.

    Read more

Company Progress Reporting

Explore recommendations and examples on how to report on supplier engagement by clicking on each tab below.

Why

Tracking the aggregate progress of suppliers’ climate action helps the company monitor progress of its supplier engagement target and adjust its approach if/as needed. Suppliers’ performance data is an important component of a buying company’s public climate reporting and demonstrating transparency to its stakeholders.

What
  • Assess and publicly disclose suppliers’ aggregate yearly emissions reductions progress as part of your company’s progress towards its overall supply chain decarbonization target.
How
  • Publicly disclose company progress towards your supplier engagement target. Relevant indicators vary but could include:
    • % or number of engaged suppliers with a goal to set science-aligned emissions reduction targets.
    • % or number of suppliers progressing towards their science-aligned emissions reduction targets.
    • % or amount of spend with suppliers who have science-aligned emissions reduction targets.
  • Use relevant channels for reporting, such as sustainability report/website, or specific platforms.
  • Include such reporting in your company’s wider climate and sustainability reporting.
Examples
  • BT's Group Sustainability Report 2021

    discusses how they use the CDP Supply chain program to report the company's supply chain progress overall (page 28).

    Read more
  • IKEA's 2021 Sustainability Report

    outlines the company's progress and aspirations on sustainability issues like circularity, emissions and renewable energy.

    Read more

5 Collaboration & Innovation

Catalytic Collaboration

Explore recommendations and examples on how to partner and collaborate to catalyze change by clicking on each tab below.

Why

Collaboration can be catalytic for each company by helping identify new solutions, enhancing knowledge, sharing best practices, and driving collective solutions at systemic or industry levels to reach emissions reductions goals.

Collaboration can help harmonize decarbonization approaches across departments, stakeholders, and industries, which can:

  • Reduce climate action ‘fatigue’ for both buyers and suppliers.
  • Encourage other buyers to join the movement, thereby encouraging collective progress.
  • Incentivize suppliers to take action in response to unified requests from multiple buyers.

The collective action enabled by collaboration can help to co-invest in exploring a variety of emerging approaches, accelerate climate action, and drive successful innovation to scale.

What
  • Collaborate with a broad range of stakeholders outside the normal scope of business operations – such as peers, NGOs, customers, governments, academia – to address specific decarbonization challenges and support a systematic approach which benefits all stakeholders.
  • Accelerate the progress of existing collaborations or create new ones where gaps need to be filled.
How
  • Adopt a collaborative mindset. While every company’s collaboration strategy will look different, all companies seeking to enable catalytic change will need to do so in partnership with stakeholders outside their existing operations to both reap and sow support for decarbonization goals.
  • You may consider:
    • Teaming up with like-minded partners in a multi-stakeholder collaboration to drive unity and change for decarbonization at a systemic level.
    • Teaming up with like-minded buyers to accelerate change amongst common suppliers.
    • Working with partners to deploy programs or other solutions aimed at supporting climate action in your supply chain.
    • Educating customers about your efforts and enlist their support.
Examples
  • Apple's Restore Fund

    makes investments in forestry while generating returns.

    Read more

Innovation and Disruption

Explore recommendations and examples on how to leverage innovation and disruptive action for change by clicking on each tab below.

Why

Many industries must be fundamentally re-designed to align with a 1.5°C pathway , which might mean a significant shift in supply chain models. Incremental change might not be enough, yet disruptive solutions often start small and may be beyond the traditional scope of suppliers.

Innovation and disruption can facilitate major progress on decarbonization while also generating significant competitive advantage. An innovation and disruption mindset can be closely linked to, and accelerate, action in the other four blocks of this supplier engagement guide.

What
  • Evaluate the need to disrupt company sourcing model to achieve overall supply chain decarbonization goal.
  • Identify, pilot, and scale new solutions, particularly disruptive ones with high potential for drastic GHG emissions reduction.
How

By their very nature, innovation and disruption cannot be prescribed. Innovative and disruptive companies are, for example, looking to:

  • Evaluate the materials and processes used to produce products/services and consider switching to more climate-friendly alternatives (input substitution).
  • Consider suppliers located in closer proximity to sales markets to reduce transportation impacts and create local resilience (geography switch).
  • Apply a circular mindset by assessing the entire product lifecycle and develop ways to move from a cradle-to-grave model to a cradle-to-cradle one (circularity).

Innovation and disruption can also accelerate your work in the other blocks, for example:

  • Foundation: Consider innovative and disruptive solutions to tackle the hotspots in supply chains that are hardest to abate with traditional solutions.
  • Procurement: Innovate supplier selection criteria and procurement team reward structure to prioritize the selection of climate-aligned suppliers.
  • Supplier Engagement: Collaborate with other buyers sourcing from the same market to create a common funding pool to support suppliers’ decarbonization efforts.
  • Reporting: Leverage technology to increase traceability and ease the reporting process.
  • Collaboration: Demonstrate leadership by sharing innovative solutions which can scale across industries.

 

 

Examples
  • Unilever's Net Zero Carbon Products Webpage

    informs about net zero carbon products by 2039 (scope 1 and 2) through innovative partnerships and engagements with suppliers.

    Read more
  • Unilever's Climate Transition Action Plan

    covers some of the disruptive innovations they are working towards (page 30-33).

    Read more

general
resources

  • Supplier Code of Conduct - Climate Clauses - TEMPLATE

    constitutes an essential tool to drive climate action.

    Read more
  • SME Climate Hub - Corporate Toolkit

    engages SMEs in value chain climate action.

    Read more
  • Supplier Self Assessment - TEMPLATE

    brings together key climate-related questions.

    Read more
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