Supplier Engagement Technologies for Decarbonization

Importance of supply chain engagement

Supplier engagement for decarbonization involves organizations working with suppliers to reduce the carbon emissions of their supply chain. These Scope 3 emissions constitute a significant portion of a company's carbon footprint, and engaging suppliers helps address this challenging part of achieving net zero.

Collaborating with suppliers through engagement initiatives enables the identification of carbon reduction opportunities, setting sustainability goals, and adopting environmentally friendly practices like sourcing cleaner energy sources and reducing waste. This engagement ensures compliance with environmental regulations, minimizing legal and financial risks. Additionally, proactive supplier engagement in decarbonization enhances brand reputation, boosting consumer trust and market competitiveness.

For more details on Scope 3 emissions and supplier engagement impact, see our first article, Supplier Engagement to Address Scope 3.

Challenges to supplier engagement and the role of technology

Managing Scope 3 emissions starts with accurate measurement and data collection from suppliers. Since emissions come from indirect sources like raw materials, transportation and product use and disposal, ensuring consistent and accurate data collection is challenging. Some of the factors contributing to this challenge and technological solutions include:

• Organizations can have numerous suppliers in their supply chain. Manually gathering sustainability data from each supplier is time-consuming (both for the customer and the supplier). Using a platform that sends questionnaires, collects, and analyzes data saves significant time for the purchaser's sustainability team.
• Suppliers often have unique approaches to reporting sustainability data. Different frameworks and terminology can impede the standardization and analysis of responses. Automated platforms allow organizations to standardize the questions and possible responses for suppliers, enabling meaningful analysis without starting from scratch for each supplier.
• Common supply chain emission factors (such as spend-based or weight-based) are often imprecise and can bias estimates. More granular approaches, such as the supplier-specific method, provide more detailed carbon estimates for specific products within the value chain.[1] Detailed information created by manufacturers is the ideal data source, but the process requires contacting Original Equipment Manufacturers (OEMs) and requesting all available Product Carbon Footprints (PCFs), Life Cycle Assessments (LCAs), and other relevant documentation for the products purchased. Many OEMs may, may not, or may have limited information for only a limited number of products (given the numerous SKUs larger suppliers can possess). Effectively managing this information through easy-to-update platforms and associating it with the products purchased or sold to customers allows for more precise tracking of Scope 3 emissions related to purchased goods and services, the usage of sold goods, and their End-of-Life stages, as opposed to relying on spend-based emission factors.

Supplier engagement platforms

Organizations face increasing challenges managing the complexity of supply chains and adapting to evolving global market conditions. The large datasets across various systems, ERPs, and custom software, lead to fragmented views of supply chain operations. Companies need to focus on making these processes more efficient, data-driven, and transparent to improve collaboration with suppliers and reduce carbon emissions across the entire value chain.

Technology is crucial for achieving supplier engagement efficiency for decarbonization by offering the infrastructure needed for data collection, analysis, collaboration, and monitoring of sustainability initiatives throughout the supply chain.

While many tools are available on the market, most resolve only part of the problem without addressing broader challenges. Organizations need an end-to-end solution such as those provided by Green Project, Microsoft Sustainability Manager, IBM Envizi, Avetta, Watershed or Sustain.Life. These successful platforms are only some of the comprehensive software solutions designed to help businesses manage and reduce their environmental impact. 

Sustainability is accomplished through a focus on energy management, reporting, carbon footprint tracking, supplier engagement, and tangible decarbonization efforts. Each supply chain management tool has its own specific set of capabilities, but the overall aim is to support companies in aligning their operations with their stated sustainability goals, improving operational efficiency, and ensuring regulatory compliance.

Use Case: Green Project 

The carbon accounting and renewable energy procurement platform, designed for corporates and their supply chains  

Green Project Technologies, an ACT Company, is breaking down the barriers to supply chain decarbonization with solutions for small and medium enterprises to take action. Green Project's Carbon Accounting & Decarbonization Platform is designed so any company, no matter their size, can accurately measure and confidently manage their emissions.

Tangible Scope 3 decarbonization is accelerated with their integrated tools for audit-ready Scope 1, 2, and 3 footprinting, supply chain engagement, and renewable energy procurement.  

Green Project's Three-Step Supply Chain Engagement Program: 

1. Mobilization: Create a training curriculum with our sustainability experts, tailored to the unique experience profile of your supplier network.
2. Measurement: Invite suppliers to measure their GHG emissions, easily monitor data status, and send tailored messages. As the data rolls in, visualize both attributed and absolute emissions by supplier and identify hotspots to inform your actions.
3. Management: Launch targeted decarbonization campaigns by giving suppliers of all sizes access to standard-recognized Energy Attribute Certificates (EACs) that meet corporate procurement criteria. Track supplier energy use and renewable sourcing across all geographies and easily download reports and claims evidence for audit readiness.

For companies serious about achieving their Net Zero goals, Green Project Technologies offers a most comprehensive and action-oriented solution to tackle Scope 3 emissions head-on.

Representative screens within the Green Project interface

Use case: IBM Envizi 

A proven comprehensive, enterprise solution for operational and supply chain sustainability data management, reporting and decarbonization.

Part of the IBM Envizi Suite, Envizi's Supply Chain Intelligence module streamlines the capture and aggregation of high-volume supplier and product-level transaction data, with a focus on Scope 3 Category 1 (Purchased Goods & Services) and Category 2 (Capital Goods) emissions.

IBM Envizi ingests transactional data, including spend, directly from the client's ERP system. Utilizing AI to categorize spend data efficiently and accurately, the emissions calculation engine draws from an inbuilt Scope 3 factor library and supplier-specific data to automate Scope 3 emissions calculations for individual order lines.

Envizi clients can utilize the inbuilt survey functionality and a supplier portal to engage suppliers at scale and work with their value chain to capture and report emissions data, collaborate to improve data quality and enhance emissions performance, and establish reliable decarbonization baselines. This data coupled with IBM Envizi's program management tools including supplier action plans and dashboards, empower businesses to establish accurate decarbonization baselines, set achievable emissions-reduction targets, and drive meaningful progress toward their sustainability goals.

Representative screens within the Envizi interface

Next steps

Scope 3 is extremely complicated. Organizations need technology to get a handle on the data of this Scope of emissions, the one responsible for the majority of an organization's emissions. World Wide Technology (WWT) has provided consulting services to various organizations to help enhance organizational efficiency and it supports sustainability management by implementing supply chain management platforms designed to facilitate supplier engagement efforts.

[1]For more details on why supplier-specific methods are superior to spend-based methods, please see: WWT launches CarbonTechAware Tool for Carbon Emission Insights.