Quantifying Supply Chain Co2 Emissions

COP28, which begins today, will see global business leaders take stock of progress since the 2015 Paris Agreement, emphasising the need for action to drive forward net-zero goals. Efficio, a global procurement and supply chain consultancy, is working with business leaders to do just that – turning attention to the supply chain to make the biggest impact on ESG. That’s because supply chain emissions typically make up 40-80% of an organization’s total carbon emissions – sometimes even reaching over 90%.

According to Efficio research, 73% of business leaders (77% of C-suite) cite minimising or eradicating environmental impacts as a key priority for the next two years – but a clear line of sight surrounding ESG factors remains a barrier to success. Data needed to quantify carbon emissions within the supply chain can span multiple systems and suppliers. This can be difficult to gather, let alone analyse for future decision-making.

In response to this challenge, Efficio is working with businesses to implement the CarbonCube®, a tool that lets procurement teams efficiently measure and monitor supply chain emissions, set targets, and monitor supplier performance.

Today, CPOs from Kantar, a global data, insights and consulting company, and Permanent TSB (PTSB), a provider of personal financial services in Ireland, are among some of the organisations using the technology to deliver their sustainability strategies. Using the CarbonCube®, PTSB has been able to leverage spend data to identify priority categories with high greenhouse emissions, gain visibility over sustainability commitments made by its supply base, and support the business’s overall sustainability strategy through target assessment and supplier outreach.

Rachel Hollywood, Procurement ESG Manager at PTSB recently commented: “Efficio’s CarbonCube® enabled us to set a strong and realistic emission baseline from which to prepare carbon reduction initiatives, supporting the bank’s strategic agenda for its 2024 SBTi submission and fostering a culture of sustainability and environmental awareness throughout our value chain – from our employees through to our supply base.”

Meanwhile, Kantar is using the CarbonCube® to accelerate its carbon reduction strategy. In a recent interview, Steve Day, Chief Procurement Officer at Kantar, acknowledged that the supply chain is representative of a very significant part of any business’s carbon footprint. He sees this as an opportunity for procurement to own the topic and highlight the value the function can bring to the wider business beyond the traditional back-office function.

However, before this is possible, Day emphasised that work needs to be done, commenting: “I see a lot of people inflating their carbon strategies and thinking about net neutrality, but in truth, you must first get to a point where you can start to measure what scope three looks like. This is where the CarbonCube® comes into play – it has helped us accelerate our thinking and begin richer conversations around what categories of spending to focus on and what our category strategies are going to be.”

Commenting on the two projects, Edward Cox, Director and Sustainable Procurement Practice Lead at Efficio, concluded: “These projects are real-world examples of how procurement and supply chain teams can take the lead in driving sustainability impacts, and how trusted data sources can be used to simplify processes like quantifying carbon emissions.

“Supply chains are most organisations’ largest source of emissions, and procurement can and should be the engine for change. Procurement needs to be accountable for a growing set of metrics that have ESG at their core. Buying the right things from the right suppliers is more important than ever.”