Accelerate your transition to Net Zero by leveraging the power of sustainable procurement

How can organisations reach their net zero targets while meeting their growth objectives? Sustainability and executive teams scratch their heads over this question. However, these two ambitions are not mutually exclusive.

Companies that proactively work to reduce their emissions can reap the financial benefits of decarbonisation and decouple their business growth from greenhouse gas emissions.

In 2023, European companies increased their investments in sustainability by 16%, and there is a good reason for that. By implementing initiatives promoting energy efficiency and materials recycling, companies can ensure their journey to net zero is cost-effective.

Reducing emissions from an organisation’s operations is one part of the puzzle, but reaching net zero will require a significant focus on supply chain emissions. Scope 3 emissions, which are outside of an organisation’s direct control, are, on average, 11 times greater than scope 1 and 2 emissions.

The procurement of goods and services is a significant contributor to these indirect emissions. Collaborating with suppliers will be essential for companies wishing to meet their scope 3 decarbonisation targets. Procurement teams must be equipped with accurate supplier data to ensure that organisations can reduce their scope 3 emissions and establish a net-zero procurement strategy.

However, many organisations currently have limited visibility into their suppliers’ emissions and how their procurement decisions influence their ability to reach net zero confidently. By equipping procurement teams with reliable supply chain emissions data, companies are positioning themselves to reach net zero through sustainable procurement.

Purchasing your way to Net Zero

Procurement professionals understand the task at hand, but limited data, complex and opaque supply chains, as well as poor engagement practices with suppliers are holding them back.

53% of surveyed Chief Procurement Officers shared that limited technological capabilities are holding back their sustainability performance, and 60% said that strengthening supplier relationships was key to supercharging the sustainable transition.

For example, as part of Mars’s commitment to net zero, they aim to cut their value chain carbon emissions in half by 2030, which involves a $1bn investment up to 2026. They recognise that 70% of their emissions are actually embedded in their procurement purchases. That is why they are working with their Tier 1 and Tier 2 suppliers to set clear expectations for emissions reductions and sustainable sourcing through a collaborative approach.

To effectively implement supplier engagement programmes and decarbonise supply chains, companies will benefit from technology solutions to streamline the calculation of scope 3 emissions and facilitate data exchange along the supply chain.

Leveraging the power of sustainable procurement to address emission hotspots

Procurement teams have the potential to play a key role in an organisation’s decarbonisation journey. That’s why the World Economic Forum has established initiatives such as the First Movers Coalition.

By combining the collective purchasing power of companies in the world’s most carbon-intensive sectors, the First Movers Coalition is an example of how procurement can incentivise supplier emission reductions and the development of low-carbon climate technologies.

Lofty statements and targets are one thing, but how can procurement teams get visibility on the data responsible for an overwhelming part of their company’s emissions?

The emergence of new emissions calculation methodologies and an abundance of cross-referenced, AI-analysed datasets on emissions, which are accurate down to the product level of purchases, means Scope 3 data blind spots can be effectively tackled.

While procurement teams are traditionally focused on cost-effectiveness, they can simultaneously identify low-carbon goods and services contributing to their organisation’s decarbonisation.

With Emitwise’s support, procurement teams can plug their suppliers into Emitwise’s supplier engagement platform, Procurewise, and begin generating accurate supplier emissions baselines that can be woven into their overall procurement and wider company net-zero strategy.

Reducing the uncertainty of scope 3 emissions to inform sustainable procurement

Addressing uncertainty is necessary as part of Emitwise’s unwavering commitment to making carbon accounting as accurate as financial accounting. There are many ways of calculating the emissions related to a given purchase or product, and they’re not all equal.

Uncertainty is unavoidable in emissions calculations, particularly regarding Scope 3 emissions. However, there are ways to quantify and minimise that uncertainty.

Emitwise leverages AI, expert verification, and cross-referenced data to increase the accuracy of Scope 3 emissions. Your procurement teams will avoid making assumptions and know their decisions are based on credible emissions data.

Practical Steps: How can I set up my procurement team to drive emission reductions?

• Step 1: Secure company-wide buy-in into the business benefits of decarbonisation
• Step 2: Calculate a baseline for your company’s scope 3 emissions
• Step 3: Identify emission hotspots within your supply chain
• Step 4: Implement a procurement strategy that aligns with science-based decarbonisation targets
• Step 5: Leverage accurate and credible scope 3 emissions data to inform sustainable procurement and engage your suppliers
• Step 6: Report your emissions and demonstrate how you achieved emissions reductions
• Step 7: Ensure compliance with global regulations with auditable data

As the world transitions to net zero, sustainable procurement opens up opportunities for companies to reap the business benefits of decarbonisation. By leveraging accurate and credible data, companies can make sustainable procurement a focal point of their Net Zero strategy.