In order to meet climate targets within their supply chain (Scope 3), companies must gather and interpret extensive data on emissions, climate risks, and other factors from their suppliers. Until now, this widely dispersed data could only be acquired through manual processes and individual supplier consultations, demanding significant time and resource investments. However, a transformation is underway. Advanced AI technology now enables the quick and automatic aggregation of climate-related supplier data from public sources, facilitating its analysis for scope 3 decarbonization.
How exactly can this work? That’s what we shared at CHOICE Event #61 with Yasha Tarani (CEO) and Nikolas Martens (Head of Engineering) from The Climate Choice. Find here their most important insights.
Why is Scope 3 Decarbonization important?
Deloitte 2023 CxO Sustainability Report
Deloitte conducts an annual study that delves into the priorities of top executives (CxOs) in large companies across the globe, shedding light on why they choose to address specific issues. Their findings reveal a significant shift in the corporate landscape. Notably, climate change has ascended to a position of paramount importance, second only to economic outlook. This signals a pivotal moment where climate concerns have permeated the highest echelons of corporate leadership. However, it’s imperative to recognize that the impetus to act on climate issues doesn’t merely stem from regulatory pressures. It also emanates from a multitude of stakeholders who demand action.
One crucial aspect that emerges prominently is the role of supply chain emissions (Scope 3). These emissions represent the lion’s share, comprising an average of 85% of a company’s total emissions. Yet, addressing supply chain emissions is a formidable challenge due to their indirect nature, which presents multiple complexities and obstacles.
Why is Scope 3 Decarbonization so hard?
Companies striving to meet their Scope 3 decarbonization targets encounter several significant challenges when it comes to effectively utilizing supplier-specific data. These challenges can impede their ability to take meaningful actions. Here’s a breakdown of these challenges and their implications:
Continuous Tracking:
Challenge: Managing annual data collection from a vast network of thousands of suppliers can be a daunting and resource-intensive task.
Implication: This continuous tracking requirement demands a robust system that can efficiently gather data from a multitude of sources without overwhelming the company’s resources. It also necessitates real-time or near-real-time data updates to stay current.
Data Quality:
Challenge: Supplier data often comes in various formats, documentation styles, and may lack comparability, making it difficult to draw meaningful insights or comparisons.
Implication: Ensuring data quality is paramount. Implementing standardization protocols, data validation, and normalization processes is crucial to derive accurate and actionable insights from diverse data sources.
Assessment Fatigue:
Challenge: Suppliers are frequently inundated with data requests from different customers, each with varying data needs, creating a state of assessment fatigue.
Implication: Companies must adopt a more strategic approach to supplier engagement. This includes minimizing repetitive requests, streamlining communication, and aligning data requests with suppliers’ capabilities and priorities to maintain productive relationships.
Lack of Incentives:
Challenge: Encouraging suppliers to actively engage in decarbonization efforts can be challenging, as they may lack motivation or a clear understanding of the benefits.
Implication: To address this, companies must develop a Theory of Change that outlines the incentives and benefits for suppliers to participate in sustainability initiatives. This may include cost savings, improved market access, or enhanced brand reputation.
The solution: the Climate Intelligence Platform
At The Climate Choice, we focus on solving the key challenges of Scope 3 decarbonization. We have therefore built the first climate-specialized platform that unites supplier data & engagement to rapidly reduce emissions. Our approach is designed to help companies kickstart their supplier climate program in days rather than in months.
So what does the approach look like? Here are the key steps:
Leveraging AI for Scope 3 Analysis: Begin by harnessing the power of artificial intelligence (AI) to analyze suppliers with publicly available data. This automated analysis provides valuable insights into their environmental performance, emissions, and climate-related practices. This initial assessment sets the foundation for informed decision-making.
Engaging Suppliers without Public Data: Recognize that not all suppliers may have publicly accessible environmental data. For such suppliers, the approach shifts towards assessing their maturity level in terms of sustainability practices. This assessment serves as a starting point, allowing you to provide constructive feedback and guidance.
Focused Benchmarking and Incentives: Identify your top suppliers and those contributing significantly to emissions within your supply chain. These key players warrant a more detailed and granular benchmarking process. Additionally, consider implementing incentive mechanisms to encourage these suppliers to actively reduce their environmental footprint. Incentives can take various forms, such as financial rewards or preferential treatment within your supply network.
The first step: AI Supplier Screening
To speed up the launch of your supplier engagement program while minimizing resource requirements, we present our new AI supplier screening program. This program leverages cutting-edge technology to streamline the process, ensuring efficiency and effectiveness throughout. Here’s a breakdown of how the AI supplier screening program operates:
1. Comprehensive Data Collection: The program incorporates an AI-driven data pipeline that autonomously gathers detailed Scope 3 information from diverse sources. This data pipeline is designed to collect granular data pertinent to your supplier profiles.
2. Robust Data Analysis: Once the data is collected, our system performs a meticulous analysis. It scrutinizes a range of climate data documents and taps into publicly available data sources to create a comprehensive profile of each supplier. This analysis extends beyond surface-level assessments to provide a deeper understanding of their climate-related practices.
How AI Supplier Screening Works:
List of Suppliers: The process commences with a list of your suppliers, encompassing the entirety of your supply chain network.
Identify Company: The AI system employs advanced algorithms to identify each supplier as a distinct entity, ensuring accuracy in the subsequent steps.
Identify Reporting Entity: It further distinguishes the reporting entity within the supplier organization, recognizing the entity responsible for providing climate-related data.
Identify Data Sources: The program identifies and categorizes the various data sources associated with each supplier, whether internal or external.
Extract & Verify Data: Leveraging state-of-the-art data extraction techniques, the AI system extracts and verifies the pertinent climate data from these sources, ensuring data accuracy and reliability.
What are the tangible outcomes of the AI supplier screening?
The AI supplier screening program yields a range of tangible outcomes that can significantly benefit your organization in its pursuit of Scope 3 goals. Here are the notable advantages and insights that emerge from this innovative approach:
Automated Analysis of Thousands of Companies: The program’s capabilities extend to the automated analysis of thousands of companies within your supply chain ecosystem. This extensive coverage ensures that you can comprehensively assess and engage with a wide array of suppliers, maximizing the program’s effectiveness.
Inclusion of Meta Data: In addition to climate-specific data, the analysis encompasses meta data that provides valuable context. This includes details such as revenue figures and sectors in which these companies operate. Such comprehensive insights enable more informed decision-making.
Audit-Ready Data: The data generated through the AI screening program is audit-ready, ensuring that it meets the highest standards of accuracy and reliability. This audit readiness is pivotal, especially when it comes to compliance requirements and reporting.
Accessibility via API: The convenience of accessing the data via an Application Programming Interface (API) streamlines its utilization within your organization’s existing systems and workflows. This seamless integration enhances the efficiency of your sustainability initiatives.
Key Insights Uncovered
The program goes beyond data collection to uncover key insights that can inform your sustainability strategy. These insights encompass:
Use Case Example: Supplier Maturity Structure
Supplier Maturity Structure: You gain a clear understanding of the maturity levels of your suppliers concerning sustainability practices. This allows you to tailor engagement strategies accordingly.
Trends in Climate-Related Data: The program identifies and highlights trends in climate-related data, providing valuable intelligence for decision-making and future planning.
Scope 3 Emission Breakdowns: Detailed breakdowns of Scope 3 emissions help you pinpoint areas of focus and prioritize decarbonization efforts.
Decarbonization Actions: The program’s analysis identifies potential decarbonization actions that can be taken. It offers actionable pathways to reduce emissions and improve sustainability performance.
Join the Early Access Program today
You can now seize the opportunity as one of the early adopters, accessing the full array of AI benefits for your Scope 3 targets through our exclusive Early Access program. By joining, you’ll experience firsthand the advantages we offer. We anticipate an average savings of 90% in both time and cost for the collection and analysis of supplier data. Don’t miss out on the chance to be at the forefront of this transformative technology.
3 Key Steps to Use Competitive Climate Intelligence
In today’s rapidly evolving business landscape, staying ahead of the curve requires more than just traditional market insights. The emergence of the future low-carbon economy has ushered in a new era of competitiveness. Companies now need to start navigating the complexities of climate information and strategies to maintain their edge. This is where the concept of competitive climate intelligence comes into play. In this article, we’ll delve into what competitive climate intelligence entails and outline three essential steps to effectively leverage it for your company’s success.
Understanding Competitive Climate Intelligence
“Competitive climate intelligence” is the systematic gathering and analysis of climate-related data and insights to drive informed decision-making. Stemming from the broader concept of “competitive intelligence,” which focuses on understanding market dynamics and competitors, competitive climate intelligence delves into climate-related aspects of business strategy. This intelligence goes beyond understanding the environmental impact of your operations. It encompasses understanding how your competitors are positioning themselves, identifying emerging opportunities, and assessing potential risks.
Benefits of Competitor Climate Insights
Here’s why incorporating information about your competitors’ climate strategies is crucial for positioning your business at the forefront:
Benchmarking: Analyzing your competitors’ climate data allows you to benchmark your performance against industry leaders. This comparison helps identify gaps in your sustainability efforts and set ambitious yet realistic goals to outperform.
Innovation Insights: Monitoring competitors’ climate strategies unveils innovative practices that can inspire your company’s approach. By learning from their successes and failures, you can adopt best practices and refine your own initiatives.
Market Positioning: Understanding how competitors position themselves in the low-carbon landscape helps you differentiate your brand. Identifying gaps in the market and addressing unmet sustainability needs can accordingly enhance your company’s appeal to conscious consumers.
Risk Management: By assessing competitors’ responses to climate risks and regulatory changes, you gain insights into potential challenges and opportunities. This proactive approach ensures your business is prepared for shifts in the regulatory and consumer landscape.
Collaboration Opportunities: Collaborative efforts within your industry can amplify impact. Analyzing competitor data highlights potential partners for joint sustainability initiatives, fostering a collective drive towards a greener future.
Investor Confidence: As environmental concerns grow, investors increasingly value companies with robust climate strategies. Demonstrating a comprehensive understanding of competitors’ approaches bolsters your credibility and attractiveness to investors.
Adaptive Strategies: The low-carbon economy is evolving swiftly. Analyzing competitor climate data aids in fine-tuning your strategies based on real-time insights. This adaptability allows your company to seize emerging opportunities and stay resilient in the face of change.
The key steps for Competitive Climate Intelligence
So how can your company take advantage of this and successfully implement climate competitive intelligence? Here are the three most important steps.
Step 1: Data Gathering and Analysis
The foundation of competitive climate intelligence lies in robust data collection and analysis. The first step is to identify and gather relevant data from both internal and external sources. While internal data might include your company’s carbon footprint and sustainability initiatives, external data encompasses market trends, competitor activities, regulatory changes, and public sentiment around climate issues. This is where AI tools shine, as they can efficiently sift through vast amounts of public data to provide actionable insights. By utilizing these tools, you can uncover hidden patterns, emerging trends, and valuable competitor strategies that inform your decision-making.
Step 2: Integration with Business Strategy
Climate intelligence should not exist in isolation; it must be seamlessly integrated into your company’s overarching business strategy. This involves aligning climate-related goals with core business objectives and identifying synergies that drive value. For example, using climate intelligence to optimize supply chain efficiency not only reduces emissions but also enhances cost savings. By weaving climate considerations into product development, marketing, and operations, you not only contribute to sustainability but also bolster your competitive position in the market.
Step 3: Continuous Monitoring and Adaptation
The future low-carbon economy is dynamic, with changes in regulations, technologies, and consumer preferences shaping its trajectory. As such, competitive climate intelligence is not a one-time effort but an ongoing practice. Establish a framework for continuous monitoring and adaptation. Regularly update your data sources, track competitor moves, and stay informed about industry shifts. This adaptive approach enables you to seize emerging opportunities swiftly and mitigate risks effectively.
Conclusion
As the business landscape transforms to embrace the challenges and opportunities of a future low-carbon economy, competitive climate intelligence emerges as a critical tool for success. By systematically gathering, analyzing, and integrating climate-related data, businesses can not only contribute to a sustainable future but also enhance their competitive advantage. With the aid of AI tools, the data collection process becomes more efficient, empowering companies to make informed decisions. Embrace these three key steps and start now to position your company at the forefront of the evolving business paradigm.
Interview with Huawei Technologies on Climate Transformation
Interview partner: Xiang Ao is the Sustainable Development Officer at Huawei Technologies Deutschland GmbH. The multinational technology corporation has set climate targets within its own organization and along the supply chain to address the global threat of climate change.
Source: Lancaster University (2020); EDGAR, FAO, UNFCC, BCG analysis
Climate Significance of the Telco Industry
Today, the telco industry accounts for about 3% of global CO2 emissions, which is about twice that of civil aviation.
With global data traffic expected to increase around 60% each year, the ICT industry could be responsible for up to 14% of global carbon emissions by 2040.
This means that the telco industry is a huge lever for decarbonization and an opportunity for real change within the economy.
So how does a major global telco company still on the path of climate transformation, like Huawei, go about reaching its climate goals? This is what we will find out in this interview:
We are pleased to have partnered with Huawei Technologies Deutschland on the Climate Performance Assessment. Can you briefly introduce yourself?
Huawei Technologies is one of the world’s leading providers of information technology and telecommunications solutions. More than a third of the world’s population and more than half of the German population use Huawei technology directly or indirectly. With the headquarter in Shenzhen, the company has 207,000 employees worldwide and operates in 170 countries through its three business units Carrier Network, Enterprise Business and Consumer Business.
Huawei has been operating in Germany since 2001 and employs more than 1,700 people in 17 locations. Huawei’s largest European research center is located in Munich. As one of the world’s leading providers of digital information and communication technologies, we are a long-standing and reliable partner of German mobile operators and many fixed network providers. In its role as an infrastructure provider, Huawei has played an important role in the digitalization of Germany for many years. We are a service provider for our customers, and thus not only the starting point for every form of digitization, but also the catalyst for social developments.
Sustainable development is an important part of Huawei’s overall strategy. To address the global challenge of climate change, we believe that technology is a key enabler of sustainable development, to create a more inclusive and environmentally friendly world. Huawei hopes to work with global customers, suppliers, and partners to promote green and sustainable development in various industries and build a low-carbon society.
How are you positioning yourself in terms of climate transformation? What climate targets have you defined for yourselves?
Green and low-carbon development is rapidly becoming a global priority. Huawei believes that digital technology will be a key enabler of nature conservation, green development, and response to environmental challenges like climate change. Digitalization and decarbonization build upon each other and can together promote green development. For years, we have followed our pledge of “Tech for a Better Planet” to proactively address climate and environmental challenges. We use innovative ICT solutions to protect our shared home by focusing on three areas: advancing energy conservation and emissions reduction, promoting renewable energy, and contributing to a circular economy.
More specifically, we are striving to achieve the following goals by 2025:
Reduce the carbon emissions (Scope 1 and Scope 2 GHG emissions) per unit of sales revenue by 16% by 2025 compared with 2019
Increase the average energy efficiency of our main products by 2.7 times by 2025 compared with 2019
Ensure all of Huawei’s top 100 suppliers (by procurement spending) will have set carbon emissions reduction targets by 2025
How did the Climate Performance Assessment help you? What are the most important lessons you have learned?
We are very impressed with the well-organized structure and detailed questions of the Climate Performance Assessment, which will help us not only to internally assess our maturity in climate performance management, but also to benchmark where we stand in the industry. From this perspective, our current status is quite positive. To have such professional and easy-to-use scoring system is a big Win for the companies who wants to recognize its management status.
The structure of the assessment plays a very important role: the current 5 dimensions methodology, which ranges from climate strategy, governance & leadership, stakeholder management, carbon footprint to decarbonization measures, is quite efficient during this program.
What are the next steps you want to address as part of your climate transformation?
Huawei will continue to contribute to climate protection by integrating more emission reduction technologies and measures, and cooperating with other stakeholders to build supply chain responsibility. Huawei is currently in the process of managing its sustainability development together with climate protection to reach a higher level.
How do you deal with your supply chain and the emissions generated here?
Huawei manages sustainability in line with industry best practices and globally recognized standards. Sustainability plays a vital role in our procurement strategy and is a key part of our supplier management process, from supplier qualification and selection to performance appraisals and portfolio management. We regularly appraise suppliers’ sustainability performance and facilitate their continuous improvement by working closely with customers, suppliers, industry organizations, and other stakeholders.
Huawei has established its procurement CSR management system based on the OECD’s Due Diligence Guidance for Responsible Business Conduct and the IPC-1401 Corporate Social Responsibility Management System Standard, and incorporated CSR requirements into our procurement strategy and business processes. Our Supplier CSR Agreement is prepared according to the Responsible Business Alliance (RBA) Code of Conduct and the Joint Audit Cooperation (JAC) Supply Chain Sustainability Guidelines.
What tips and best practices would you like to share with other companies?
Environmental protection and decarbonization require the participation and contribution of all of us. Huawei has already made efforts in various fields and areas by promoting product improvement and technologies development, such as the industry’s first MetaAAU to support 384 antenna elements to reduce energy use by 30%, and industry’s first smart optical modem to reduce power consumption by 30% etc.. It would be great to see our suppliers, customers and business partners move forward, and we are happy to share more details and experiences with all interested parties.
Thank you for the honest and insightful interview, Xiang Ao. We are very pleased about the cooperation with Huawei Technologies Deutschland GmbH and look forward to driving forward the climate transformation of the economy together.
Interview with CTDI on their Climate Transformation
We are excited to work together with CTDI to advance climate transformation. Can you please introduce yourselves?
Interview Partner Jochen Bolzhauser, Quality & OpEx Manager at CTDI: CTDI is a global full-service company in the communication industry with over 20,000 employees across 100 locations. Test, repair, and integrated logistics services as well as spare part management of electronic systems are our core business. Our customers include major network operators, service providers, and many global manufacturers. CTDI is a family-owned business based in West Chester, USA. In Europe, we have over 4,400 employees across 12 countries, with our European headquarters located in Malsch near Karlsruhe.
The technologies we handle include access and transmission network equipment, all mobile technologies, set-top boxes, gateways, mobile devices, entertainment electronics, money and payment systems, industrial scanners, and printers.
How do you address climate in your business model?
Repair instead of throwing away – through our sustainable services, we help our customers reduce their own and global CO2e footprint. With “CTDI Planet Protect,” we aim to take this to the next level. We optimize our business processes to better support the circular economy. We also ensure that everyone takes responsibility for environmental protection within their daily work processes.
What are your climate goals?
We want to contribute to reducing CO2e emissions and conserving natural resources both as a company and through our services and technical developments. Therefore, we have aligned our climate goals with the Science Based Targets and aim to achieve a 100% reduction of Scope 1+2 emissions at all of our European locations by 2028. By 2030, we aim to reduce our Scope 3 CO2e emissions by 50%.
We conducted the Climate Performance Assessment together. What was your motivation for this?
Continuous improvement is one of our most important processes. Therefore, we regularly undergo ISO 9001 and 14001 audits, as well as customer audits, to continually develop and uncover untapped potential as a company. Another motivation is that CTDI always strives to obtain independent opinions on our environmental strategy. Only in this way can we achieve our ambitious climate goals. The Climate Performance Assessment helped with that.
What are the most important learnings you have gained? What are the next steps?
An important learning is that our “Planet Protect” strategy still has potential for improvement. One of the most important findings is the need for third-party auditing. We want to focus on this aspect in the coming years and possibly acquire a certified CO2e accounting software.
How do you deal with your supply chain and the resulting emissions?
We are in the process of demanding emissions from all of our logistics service providers. New contract partners will only be accepted if they support our “CTDI Planet Protect” goals. In the area of shipping, we already use CO2e-neutral logistics service providers in almost all areas.
What are best practices you want to share with other organizations?
Communication with all employees is the key to success for a successful implementation of environmental goals.
Thanks for the interview Jochen Bolzhauser, we are happy to drive climate transformation together!
IT Sustainability is a fundamental part of the Allianz business model
Rainer Karcher, Global Head IT Sustainability at Allianz Technology
As Global Head of IT Sustainability at Allianz Technology, Rainer Karcher’s role is to drive the decarbonization of the IT operations of the Allianz Group, one of the leading integrated financial services providers worldwide. He is further responsible for the integration of Sustainability according to the United Nations Sustainable Development Goals (SDGs) into all parts of Allianz.
Rainer will speak at a fireside chat at the CLIMATE TRANSFORMATION Summit 2023. Today we are happy to meet with him to discuss together the urgency of climate action, and the role of digitalization in the successful implementation of climate targets. Don’t forget to book your Summit ticket to meet Rainer at #CTS2023 in May!
What does IT Sustainability mean for Allianz Technology and for Allianz overall? What role does digitalization play in the successful implementation of climate targets?
IT Sustainability is crucial for the business model of Allianz. We are a digital company – our products and services are mainly digital; we do not have factories or production sites. Therefore, the digital part represents about 30% of Allianz’s greenhouse gas emissions. With the increase of digitalization, this percentage can easily go upwards.
When speaking about the role of digitalization in achieving climate targets, there are two aspects: it can be part of the problem, if we don’t act responsibly, but there is also a huge opportunity that it is part of the solution. The more we get digitalized, the more we can get automated, creating an efficient digital world and reducing energy consumption.
You speak about decreasing the organization’s footprint, while increasing its handprint and ensuring a heartprint. What are the concrete steps taken to support this approach?
Allianz is a large corporation, with operations in more than 70 countries. So, the chances that there are redundant applications, software or services are quite high. All our entities act independently, and this is why our main goal is become more efficient together. Transparency is where we need to start: We must know exactly which energy is being consumed, where and why, and also understand what we can to do to make things better.
We can gain this transparency once we have a fully automated treatment of data, and with the help of AI solutions we will understand how we can create more synergies and become more energy efficient.
Another principle we apply is ‘following the sun’. We are trying to place the IT systems in a way that there is always renewable electricity available. At the moment, a lot of IT processes are handled at night, and the problem with that is that, if there is no wind blowing or sun shining, you don’t have renewable electricity. So, we are reconsidering all this in order to always allow possibility to have climate neutral solutions.
What are your goals with this strategy and when will you call it a success?
We do have two main targets: to achieve net-zero operations by 2030 and to reduce energy consumption from IT and communications by 2025 by 20% compared to the pre-COVID values, in 2019.
As long as digitalization increases energy consumption, we can only achieve our targets by a good understanding of how to handle data more efficiently and responsibly.
How do you deal with your supply chain and the emissions generated here?
In procurement, we are facing the challenge of having around 90% of the emissions coming from external third-party partners. This challenge can only be tackled in a close collaboration with our partners. And this is why I think that for Allianz Group the SDG number 17 – Partnership for the goals – is key.
This means we are trying to work together instead of working against each other: there shouldn’t be an approach where we say, “we are the customer, you are the service provider”, but instead we need to find our joint path in a collaborative way. And I have to say, so far this approach works pretty well.
Additionally, we have considered a measurable comparison of the environmental impact for our partners. For example, when it comes to tenders, we now have KPIs in place for measuring the environmental impact of the potential partners by asking them to answer to a certain set of questions, including social and human rights aspects, and evaluating them on a scale from 0 to 10. This indicator is now being considered the same way we used to look at the prices, offering us the chance to choose partners with a similar set of values.
I think the biggest misunderstanding in sustainability is that there is an expert out there that will come and save us all. The truth is what we need is multiple expertise as well as collaboration. So, gathering all existing expertise around one virtual table makes the event so interesting for me. I’m very much looking forward to some new inspiring information and, of course, to also share my own experience and have an open exchange.
THE CLIMATE CHOICE says thank you for a special 2022!
What a year for climate champions! We all faced major new challenges in 2022 – especially companies that were particularly hard hit by the energy crisis and supply chain bottlenecks. Despite everything, you, the CLIMATE community, have continued to work with us to drive the transformation to a low-carbon economy. There have been many positive highlights and developments for which we at THE CLIMATE CHOICE want to say thank you. Let’s take a look at how 2022 allowed us to boost climate transformation all around the globe!
Kicking off the year with strong, new partners
Our year began with a firework of climate action. We were able to start working with many new major and influential customers for the Climate Intelligence Platform, including, as two special highlights, the corporate projects with the mobile phone provider o2 Telefónica and the baby food manufacturer HiPP. We kicked off inspiring collaborations to elevate the transparency of emissions along their supply chains by using our platform.
HiPP was able to successfully identify climate-related risks and potentials of five suppliers with the help of our software tool. HiPP’s Head of Sustainability Management Dr. Johannes Knubben reflects: “The software tool from THE CLIMATE CHOICE enables us to implement a scalable and reliable process to increase the climate-relevant transparency of our supply chain.”
Our next goal is to extend the software-driven climate data collection initially to other partners and ultimately to HiPP’s supply chain. Through an integration of THE CLIMATE CHOICE software tool into HiPP’s sustainability and procurement strategy, the full potential of climate-relevant supplier management is to be exploited.
Our corporate project with o2 Telefónica also successfully identified climate-related risks and potentials of the selected suppliers. The company is now able to develop a transparent, scalable process for collecting comparable data on the climate maturity of suppliers.
In the next step, we will integrate our platform into the procurement dashboard of o2 Telefónica. The climate-relevant data collection for the decarbonization of Scope 3 will be extended to around 1,000 suppliers.
CLIMATE TRANSFORMATION Summit 2022
The climate action kept on flowing and reached a new peak at our #CTS2022. For the third year in a row, we brought together international climate leaders and procurement experts for our two-day 100% online Climate Transformation Summit.
More good news: We just announced the date for #CTS2023! We cannot wait to welcome you on May 11 & 12 2023 for two days full of climate action! Our focus this year: Making it happen – the decarbonization of supply chains! Together with you and leading experts, we will find out how we can impement CO₂ reduction along the value chain.
The most important insight we gained from the discussions at the #CTS2022 was that small and medium-sized enterprises (SMEs) in particular still find it very difficult to get a quick start in climate transformation because they often do not have sufficient know-how and/or resources. In response to this challenge, we worked over the summer on a new solution offering.
The result: In October, we launched our digital and freely available Climate Readiness Check in partnership with 10 leading sustainability organizations. Among those B.A.U.M. e.V., Bundesverband Nachhaltige Wirtschaft e.V. (BNW), Stiftung Allianz für Klima und Entwicklung, Jaro Institut für Nachhaltigkeit und Digitalisierung e.V., and the Deutscher Mittelstands-Bund (DMB).
The Climate Readiness Check offers SMEs an easy entry point into their climate transformation: through knowledge and insights into their own climate maturity, benchmarks, suggestions for improvement, and access to a B2B climate data platform.
Our Launch was a full success! We are beyond happy to see so many companies kicking off their climate transformation with our Climate Readiness Check! We can’t wait to see who will join us in 2023!
In addition to the projects we developed ourselves, this year we were also part of pioneering external initiatives. Among them, one highlight: In August, we were selected from more than 2.000 applicants for the Climate Lab and Kickstart Innovation scale-up program in the finance and insurance track! Kickstart is one of the largest European Innovation Platforms. Each year they chose a select number of the best international startups to participate in a 10-week program.
We were honored to work in the program with corporates – such as Swisscom, Credit Suisse, AXA, Sanitas, Post Finance, La Mobilière, Coop, CSS, SATW – from the DACH region, who strive to reduce climate risks and emissions in value chains.
Thanks for the EU ‘Best Digital Solution’ Award
The cherry on top of 2022 was winning the “Best Digital Solution” award from the European Commission. The award recognizes the development of our software platform for the collection of climate-relevant data from suppliers and attributes it great impact potential for the greening and digitalization of European industry.
On behalf of the European Commission’s DG GROW, Deputy Director General Hubert Gambs emphasized: “Digital solutions are not only useful to be competitive and provide better value to European customers. They are also key to making our economy greener and European businesses more resilient to future shocks.”
We are so grateful and can’t wait to enable more businesses in boosting their climate transformation!
Many, many thanks for driving our Mission together!
Our mission at THE CLIMATE CHOICE is transforming every company into a climate champion and enabling businesses to make procurement decisions that are aligned with the 1.5-degree-goal! We have summarized our mission for you in this short video.
We are very grateful to work with inspiring companies – and that media is increasingly sharing our mission. THE CLIMATE CHOICE says thank you Süddeutsche Zeitung, t3n, Berliner Morgenpost, Gründerszene and many more, for featuring our platform and allowing us to gain more visibility on our mission!
Our Wrap up, 2022!
Let’s wrap it up before we go back to wrapping presents. 2022 was a complicated year for the world. We learned that the energy transition is a major driver for the overall climate transformation. We literally saw that it is interlinked with peace and has a positive impact on people, planet and profit. At the THE CLIMATE CHOICE we are therefore honoured that we were able to work on one piece of the puzzle – bringing us towards a regenerative future. These are our 5 highlights:
Started working with major new customers, including HiPP and o2 Telefónica
Held our 3rd 100 % digital CLIMATE TRANSFORMATION Summit with 64 speakers and 1.000 participants from 59 countries
Launched our new Climate Readiness Check, accessible for companies of all sizes for free to kick off their climate transformation
Won the EU ‘Best Digital Solution’ award of the Get Digital Initiative from the European Commission and the European DIGITAL SME Alliance
Süddeutsche Zeitung, Gründerszene, t3n, Berliner Morgenpost, Beschaffung aktuell and many more shared our work
Our biggest ‘THANK YOU’ goes to you, Climate Champion! If you are reading this, you are dedicating your valuable time to make this climate transformation a positive one. Whether you are Sustainability Manager, Procurement Expert, or Tech Champion: You are on a mission to strive together with us for an economy that allows the world to stay below 1.5 degree. Let’s start the new year with the same energy and even more climate action. Cheers to 2023!
Your #TeamClimate
THE CLIMATE CHOICE
THE CLIMATE CHOICE Founders Rey Farhan, Lara Obst and Yasha Tarani
SMEs are getting Climate Ready – How to succeed in the race to zero!
Small and medium enterprises (SMEs) play a major role in the national economic development in countries worldwide. Globally, they account for about 90% of all companies, 50% of employment and a significant impact on supply chain performances.
Like companies of all sizes, also SMEs are facing several challenges today. Global supply chains struggle, long term planning is difficult and upcoming climate regulations impose new guidelines on businesses. SMEs often lack resources and capabilities to deal with the fast changing circumstances.
Find in the following how the freshly launched Climate Readiness Check supports companies to move towards climate transformation.
SMEs becoming Climate Champions
SMEs play a key role in achieving the 1.5 degree target. Not only as they are key economic players, but also as they are essential to any global supply chain. This is important, as emissions from supply chains are typically 11.4 times higher than direct corporate emissions. Many large companies therefore channel their climate protection requirements along the supply chain to their suppliers, often SMEs.
This means whole businesses have to transform the way they create value! Every company needs to become a Climate Champion, contributing to a climate compatible and future-oriented economy. Customer inquiries and international climate reporting standards are increasingly demanding effective action. Climate action is thus one of the top priorities for SMEs today.
However, many SMEs still lack the necessary resources to get into the various aspects of climate transformation and to create a concrete roadmap based on this. The question is: How can SMEs manage their climate performance, prepare for climate-related risks and position themselves as reliable leaders for decarbonization within supply chains?
Go beyond Offsetting, manage your Climate Performance
It all starts with understanding the actual climate performance of a company. Which goes way beyond measuring CO2 and offsetting it. International disclosure guidelines, such as TCFD, ask companies to assess, manage and report their climate performance holistically. The most essential five dimensions are: governance, strategy, transparency, KPIs & metrics and decarbonisation actions.
However, collecting the relevant data within a company can be challenging, especially for SMEs. Lacking time, tools and know-how makes it difficult to gather, streamline and manage the needed information.
Taking first steps towards Net Zero
In the last few years, we have witnessed the need for an easy start into the climate transformation journey. Many companies, especially SMEs, approached us with the questions how to set up priorities, identify most needed actions and start improving over time.
“For a holistic change towards a sustainable economy, tools are needed that provide SMEs with an initial orientation on how they can transform their business in a climate-compatible way. For this challenge, THE CLIMATE CHOICE has developed a practical solution. The Climate Readiness Check is an accessible tool for SMEs that enables a new push in the strategic pursuit of climate targets in SMEs.”
Phoebe Köster, Climate Policy Manager at Bundesverband Nachhaltige Wirtschaft e.V.
This is why we are happy to release today our digital and free Climate Readiness Check! Which we launch in partnership with 10 leading sustainability organizations, including B.A.U.M. e.V., Bundesverband Nachhaltige Wirtschaft e.V. (BNW), Fairantwortung e.V., Foundation Development and Climate Alliance, Jaro Institute for Sustainability and Digitalization e.V., the German Association for Small and Medium-sized Enterprises (DMB) and Zentrum für Nachhaltige Unternehmensführung (ZNU).
“Climate friendliness is increasingly becoming a competitive advantage for small and medium-sized enterprises (SMEs). On the way to climate-neutral operation, the Climate Readiness Check is a useful and low-threshold aid.”
Steffen Kawohl, Transition Manager at Deutscher Mittelstands-Bund e.V.
The Climate Readiness Check offers companies of all sizes an easy entry point into their climate transformation: through insights into their own climate maturity, suggestions for improvement and a basic access to the climate intelligence platform.
Get started with your free 5-minute Climate Readiness Check
The free Climate Readiness Check helps to overcome the initial barriers of Climate Transformation and to take the first step towards climate action. The software-driven climate self-test is manageable in 5 minutes and guides through the most relevant indicators of a company’s climate maturity.
Here is how the Climate Readiness Check empowers companies.
1. Be ahead of Climate Regulation
Completing the Climate Readiness Check will grant insights, which help companies taking first steps towards climate disclosure requirements.
2. Discover Quick Wins
Assessing the climate maturity of a company, the Climate Readiness Check proposes relevant areas for improvement and suggests immediate actions.
3. Access to Climate Platform
Successfully completing the Climate Readiness Check grants access to the Climate Intelligence Platform, where companies can discover like-minded businesses.
Climate Ready, Steady, Go!
“Climate Transformation is a goal we can only achieve together. Our free Climate Readiness Check gives first insights on a company’s individual climate maturity and allows access to the Climate Intelligence Platform, where companies can connect with other companies on their path to zero. We are excited to support businesses of all sizes to take first steps towards a low-carbon economy together.”
Lara Obst, Founder & Climate Officer at THE CLIMATE CHOICE.
Getting my Suppliers on Board – 5 Steps for Successful Supplier Collaboration
Achieving climate targets is a challenge that we can only meet together. This is especially true for companies, as up to 90% of their emissions typically originate in the supply chain. So now, more than anything, it’s a matter of establishing a successful supplier collaboration to achieve common climate targets.
By including suppliers in their sustainability strategy, companies can reduce emissions on a much larger scale across the value chain, rather than just internally. It also means they can make their supply chain more resilient by overcoming climate-related risks and building trusted relationships. Accordingly, more and more companies are asking themselves: How can we get all our suppliers on board and build a successful collaboration on decarbonization measures with them?
In the following section, we present 5 key steps for building strong business partnerships and an effective supplier collaboration network.
5 Steps for Supplier Collaboration:
1. Be Transparent and Measure Data
Which of your suppliers have already set climate targets? Which are already at an advanced stage of implementation? And which still need support? For successful supplier collaboration, a company must first answer all these questions and build a fundamental understanding of the climate maturity of its suppliers. Only then can it know where exactly its emissions come from along the supply chain.
In order to achieve this understanding, companies must first set up a consistent and scalable process for collecting comparable data on suppliers’ holistic climate maturity. To ensure comparability and quality standards, the data collected should be aligned with international climate reporting frameworks and cover the areas: governance, strategy, risk, metrics & KPIs. Data-driven tools like the Climate Performance Assessment help to obtain and manage these primary data points.
2. Ensure Supplier Commitment
In order to engage all suppliers in your climate transformation journey, they need to be able to trust the data collection process and understand how they benefit from the joint climate efforts. It is the company’s responsibility to communicate the importance of the collaboration and the associated opportunities for suppliers.
Working with suppliers means creating a “shared value” that will drive and motivate the supplier to align with climate targets. Establish a two-way communication flow, where expectations as well as concerns can be communicated on both sides. Make sure to explain how you will use their data, emphasizing that the participation will be the foundation for an enhanced collaboration in the future.
Important to note: Do not miss to transparently communicate where you stand yourself and only set appropriate expectations from your suppliers accordingly.
3. Set Up Climate Data Management
After collecting the required data, a decisive factor is how to process and manage it. Firstly, make sure that the data is accessible to all participating suppliers – because collaboration for decarbonization is not a one-way street, but a joint collaborative journey with mutual benefits and learnings.
Secondly, the data must be analyzed accordingly in order to uncover risk areas as well as opportunities for climate action. The insights will only support a successful climate transformation if they lead to appropriate conclusions and subsequent actions.
4. Invest in Supplier Relationships
With this essential data-foundation, engagement and collaboration for decarbonization can begin. However, this cooperation can only work if it is built on a long-term relationship based on trust. Simply dictating guidelines does not work. Instead, there must be a mutually beneficial exchange that helps both the company and the supplier achieve their climate targets.
This is why now it’s time to: invest! To improve the supply chain’s climate performance, the company must seek to understand what suppliers need for this end. Investing in supplier relationships therefore means to collaborate on solutions that fit the interest of all stakeholders. By collaborating in forecasting, planning and capacity management, businesses can enable their key suppliers to redesign their processes and work more efficiently, which will immediately benefit the company and optimize its value chain.
5. Monitor and Optimize Continuously
Joint work on climate actions along the supply chain is never complete. Once you have successfully launched the supplier collaboration, it is now a matter of continuously monitoring the ongoing actions. In this way, successes can be made visible and measurable. Furthermore, this enables you to adapt processes and further develop measures if necessary.
It is helpful to use supply chain goals as a starting point and regularly measure upstream and downstream environmental impacts along the supply chain to see how effective various measures are. Also make sure that you constantly increase the goals in order to further challenge and motivate yourself and the suppliers
Challenges of Supplier Collaboration
Nevertheless, there are several factors that make supplier collaboration a challenge for many businesses. Working together with suppliers and investing in long-term and strong partnerships requires time and effort for businesses and a fundamentally different mindset on buying processes. In addition, many companies still lack the resources and tools to collect and manage climate-related data from their suppliers. They struggle to identify the carbon hotspots along their supply chains.
In order to make supplier collaboration easier for companies, we have established the Climate Data Platform. It enables businesses to streamline and manage climate-focused data from their suppliers and to improve collaboration along the supply chain for efficient decarbonization.
You want to know more about our data-based software tool for supplier collaboration? Book a demo today and learn how to empower your suppliers to set up a structured climate management approach and to successfully support suppliers in their climate transformation efforts.
New proposals for climate-related disclosure standards by ISSB – This is what you need to know
International investors increasingly demand information on environmental, social and governmental (ESG) matters. Transparency around sustainability and climate-related affairs gains relevance today more than ever. According to the IFRS (International Financial Reporting Standards) Foundation, the current regulations do not ensure that climate-relevant information is disclosed to a reasonable extent, but still encourages an inconsistent and selective application of voluntary standards.
In November 2021 at COP26 in Glasgow, the formation of the International Sustainability Standards Board (ISSB) was announced. The ISSB is an independent private-sector body that operates under the oversight of the IFRS Foundation. Its aim is to develop a globally applicable and comprehensive set of sustainability disclosure standards that works for major economies as well as for emerging markets.
Therefore, the ISSB has proposed two new standards, in order to create further consistency, comparability and reliability across climate disclosure. The standards require companies to reveal relevant information about its significant sustainability-related risks and opportunities, necessary for investors to assess a company’s enterprise value. The G7 welcomes the establishment of the International Sustainability Standards Board and calls on all relevant stakeholders to participate in the ongoing consultation on the proposed standards. In order to create a practical, flexible and proportionate disclosure baseline, that is ultimately suitable for small- and medium-size enterprises, the G7 invites other reporting initiatives to cooperate in the process of elaborating the baseline.
Two ISSB proposals for sustainable-related disclosure
Based on the work of existing investor-focused reporting initiatives – including the Climate Disclosure Standards Board, the Task Force on Climate Related Financial Disclosures (TCFD) and the World Economic Forum´s Stakeholder Capitalism Metrics – the ISSB is working towards the incorporation of the global baseline into legal requirements, with the aim to become the global standards-setter for sustainability disclosure for the financial markets.
Both of the new standards are mainly built upon the recommendations of TCFD. While one of the proposals sets out general sustainability-related disclosure requirements, the other specifies on climate-related disclosure. Learn more about the climate-related disclosure requirements in the following.
What is the goal of the ISSB Climate-related Disclosure Standards?
The objective of „IFRS S2 Climate-related Disclosures“ is to require a company to disclose information about its exposure to significant climate-related risks and opportunities. This enables investors to access relevant information in order to make climate-compatible and sustainable financial decisions. The goal is to assess the effects of significant climate-related risks and opportunities and to understand how a company’s use of resources and activities support managing its risks as well as to evaluate the options to adapt planning, business model and operations to significant climate-related risks and opportunities. Companies are required to disclose information along the dimensions Governance, Strategy, Risk Management and Metrics & Targets. Find more detailed information on the disclosure regulations along those dimensions in the following section.
1. GOVERNANCE
Governance body (e.g. board, committee, etc.) with oversight of climate-related risks and opportunities
Skills and strategies that ensure that climate-related risks and opportunities are being tackled
Information on the extent to which climate-related opportunities and risks are being considered in the company’s decisions on major transactions and risk management policies
2. STRATEGY
Effects of climate-related risks on business model, strategy and cash flows
Climate resilience and flexibility (in terms of transitioning) of strategy and business model
3. RISK MANAGEMENT
Identification and assessment of climate-related risks and opportunities (Data sources and covered scopes of operations)
Prioritization of climate-related risks relative to other types of risks within the company
Processes in comparison to prior reporting periods
4. METRICS & TARGETS
Information relevant to the cross-industry metric categories, in order to create transparency around the assessment strategy of its performance
Progress towards the targets it has set (e.g. mitigation or adaptation to climate-related risks or maximizing climate-related opportunities)
How do companies prepare for the ISSB requirements?
Since enterprises will be required to disclose climate-related information along these four dimensions, they will face the challenge to collect climate-relevant data and analyze their climate performance. How do companies prepare for that?
Today, many companies are already using data-driven software tools, which helps them to analyze their climate performance holistically. The Climate Performance Assessment offers a fast and structured data analysis aligned with internationally recognized standards. It enables companies to holistically analyze their climate performance along the four dimensions Governance, Strategy, Metrics & Targets and Transparency. The Climate Performance Assessment is fit to meet the ISSB’s climate-related disclosure requirements as it covers the key disclosure information.
You want to know more? Download our new Whitepaper to find more details on the upcoming ISSB standards and how to prepare for them here.
Image: Unsplash
Climate Report THE CLIMATE CHOICE – Our Climate Performance 2021
In 2021, many companies seized the opportunity of climate transformation, set climate goals and tackled them with concrete decarbonization measures. THE CLIMATE CHOICE supports companies in becoming a CLIMATE Champion, reducing emissions along the entire supply chain and thus improving their climate performance.
Transparent reporting plays a major role in this and is a crucial part of corporate responsibility. It is important to us, even as a startup, to reflect critically our own climate performance and to continuously throve to improve it.
SUSTAINABILITY GOALS AND MISSION
The mission of THE CLIMATE CHOICE is to make climate transformation accessible to every company in a simple and straightforward way. Through our platform, we aim to enable companies to reduce around 50% of supply chain emissions by 2030. Additionally, we also focus on contributing to the 1.5 °C target through our own corporate activities. All our corporate and business actions underline this goal in order to transform the economy and create a regenerative future.
OUR CLIMATE PERFORMANCE ALONG 5 DIMENSIONS – A STATUS QUO ANALYSIS
Along the 5 dimensions of our CLIMATE Performance Assessment – our industry-independent climate rating, we have analyzed our climate performance for 2021. A comprehensive analysis goes beyond simply measuring the carbon footprint and includes the intensity and speed with which climate targets are implemented through concrete measures and effective climate management. This enables us to track our corporate action and identify tangible strengths and potentials, which we can use in the future as a basis for climate-relevant decisions.
With our CLIMATE Performance Assessment along with the CLIMATE Data Platform, we support companies in analyzing their own climate performance as well as the climate impact of their suppliers. Up to 90% of a company’s emissions occur within the supply chain through purchased products or services. Hence, we help strengthen collaboration between companies and suppliers and make procurement practices climate-compatible. To promote cross-disciplinary exchange, we organize regular online CHOICE events in which experts speak on relevant topics related to supply chain decarbonization and use our CLIMATE magazine as a medium for knowledge transfer. The annual CLIMATE Transformation Summit, which has already been organized twice since 2020, provides a stage for a wide range of debates and knowledge exchanges. We organize the Summit to strengthen cross-industry collaboration and enable knowledge sharing. In this way, our business model contributes directly to the UN Sustainable Development Goals 13 “Climate Action” and 17 “Partnerships to achieve the Goals”. Moreover, as a company we are part of B.A.U.M. e.V., a network for sustainable business, and the “Leaders for Climate Action” initiative. This helps us to keep on critically examining our own business model and to multiply the impact of our own measures through cooperative exchange.
2. Climate Leadership
A company’s climate management is relevant in order to achieve climate targets and to act in accordance with the requirements set by government bodies and meet customer expectations . We benefit from clear responsibilities- Lara Obst as Chief Climate Officer and Theresa Wenning as Climate Performance Analyst. They are specifically responsible for identifying and managing climate-related issues. This enables us to analyze and transparently disclose climate-related opportunities and risks, particularly with regards to financial and strategic impacts.
3. Climate Performance
The Climate Impact dimension focuses on key indicators and targets for corporate climate transformation in order to analyze the impact of business activities on the environment and society. The most important key figure here is the company’s carbon footprint, i.e. the calculated CO2 emissions balance.
Our CO2 emissions for 2021 total 4.05 metric tons. Last year, our emissions were 7.7 tons. The difference is explained partly by the use of a different software tool and partly by the use of average values last year. Our Corporate Carbon Footprint is currently still being validated by our external partner myclimate. This includes emissions from Scope 1-3, i.e. not only the emissions from our own corporate activities, but also those generated along the entire supply chain.
4. Climate Transparency
Through regular exchange with our Advisory Board and networks (B.A.U.M. e.v. and BNW), we involve external stakeholders in setting climate-related strategies, policies and performance improvements, thus creating effective stakeholder management. In weekly demo meetings, we also ensure internal communication of climate-related topics within the team. We are currently working with the entire team to develop a Code of Conduct that covers responsible behavior with regards to human and labor rights, as well as guidelines for adherence to sustainable actions within the company.
5. Climate Actions
We use 100% carbon neutral web hosting and cloud services for our platform. In addition, our software is hosted according to the highest security standards on a 100% wind-powered data center in Germany and is DSGVO and BDSG compliant, and ISO/IEC 27001 certified. We also use GLS, a sustainable banking provider that finances sustainable businesses and supports projects such as setting up of wind turbines and organic farming, among others. By using refurbished hardware, all employees contribute to lower emissions in their daily work. In addition, together with MOBIKO, the company supports low-carbon mobility through flexible mobility budgets for employees.
Even during the fully online CLIMATE Transformation Summit in June 2021, which connected around 600 participants with climate experts and solution providers, emissions were significantly lesser as compared to an offline event. Together with our partner Fokus Zukunft GmbH & Co. KG, we calculated 4t of CO2 emissions, which included the use of Zoom, YouTube broadcast, Slack and Gather-Town as well as the travel of two team members by train. Through a gold standard wind power project in Turkey, we offset twice the emissions created.
THE CLIMATE TRANSFORMATION IN 2022
Implementing climate goals together – that’s the motto for the coming year 2022. Our learnings from the CLIMATE Performance Assessment will help us to drive forward the climate transformation within our own company and to focus in the coming year on measures that have not been taken care of so far. We have recognized that it is not sufficient to simply offer a climate-friendly product or service. Every company must start internally, make the entire corporate DNA climate-friendly and prioritize sustainability as a core area of corporate management. The most important trend for this in the coming year will be supply chain decarbonization – climate relevant procurement decisions are what matter! Let’s make this happen in 2022 and seize the opportunities of climate transformation by working together through cross-industry cooperation to develop concrete measures and implement climate targets along the entire supply chain.
Do you also want to get a better overview of your company’s climate-related opportunities and risks? Then contact us and request information on the CLIMATE Performance Assessment.
