The Climate Guide for Supplier Engagement. Making it happen.
All companies today have a strong interest in climate protection and sustainability. This does not come by chance, but by threatened planetary boundaries and upcoming regulation. To achieve the 1.5°C goal, emissions worldwide need to be drastically reduced immediately. With the Paris Agreement, we globally promised to cut emissions halve by 2030 in order to reach net zero latest by 2050.
Getting Climate Ready!
Many companies are therefore already trying to make their businesses more climate-friendly. But it does not stop here. Rather than media-effective climate promises, we need strong collaboration and actions to make decarbonization happen.
Tackle the Scope 3 Challenge together with Suppliers
The recently published Supplier Engagement Guide from the Exponential Roadmap shows why: Companies that increase their climate performance do not only create significant competitive advantage and enhance their own long-term resilience, but also accelerate the needed climate transition of economy.
Find in the following what is needs to make this transition happen and how THE CLIMATE CHOICE supports companies to mange their climate transformation successfully.
Climate Actions within the Supply Chain are Crucial
Why do climate leaders transform their business actions within the supply chain into climate actions? In addition to the obvious incentive to reduce climate risks, emissions and costs, successful companies are driving their climate transformation along the supply chain in order to unlock new potentials and market opportunities.
Business Playbook on Climate Action by Exponential Roadmap
However, purchasing companies face the challenge of putting their climate targets into practice while managing the “black hole” in the supply chain. This is where 90% and more of the emissions are typically generated – which can only be reduced together with the suppliers. Thereby, it is clear that the climate-related performance of a company is the focus of every business relationship today.
Collaboration to Performance against Climate Success Indicators
It is essential to collaborate with suppliers to identify hot spots and implement reduction measures. In doing so, companies rely on climate-relevant success factors in order to transform their own business processes and their procurement decisions along the supply chain. Using a set of climate-relevant indicators, enables companies to recognize climate champions in their supply chain who are already ahead of the market, set up their climate management holistically and reduce emissions, costs and risks – and thereby open up new opportunities.
The 5 Dimensions of Holistic Climate Management
Using such climate-related indicators, it is not only important to look at the key figure CO2, but especially at the HOW. How does a company manage climate protection: Is a governance structure in place that makes climate goals achievable, is a clear climate strategy implemented that is compatible with the Paris Agreement, how are risks and opportunities controlled internally and externally, and which CO2 information about the product and company as well as actual decarbonization measures can be disclosed?
We call this approach: Holistic Climate Management. It uses a set of climate-relevant indicators to assess, manage and improve a company’s overall climate performance. Those indicators base on international climate disclosure requirements from TCFD (Task Force for Financial Disclosure) and the principles of Greenhouse Gas Protocol and SBTi (Science-Based-Target Initiative) for emission reduction. They require companies to provide their stakeholders with a holistic view of their climate management in the five essential areas:
- Risks & Transparency
- Metrics & Targets
- Decarbonization Measures
Getting from Climate Goals to Actions – Easier said than Done!
When companies want to streamline, manage and improve the climate performance of their own company and suppliers today – they currently have to send e-mails with excel spreadsheets and self-created questionnaires to hundreds or even thousands of international suppliers. This task often comes on top of the workload of overburdened climate officer or procurement manager.
The resulting data however either does not come back at all, since there are no clear incentives for suppliers and instead there are more top-down processes, or in poor, non-comparable quality. And even if you only start in your own company and try to master the current regulatory and standard landscape, it is difficult to keep track of the regular changes.
At the same time, almost all companies receive similar inquiries from their customers and business partners, often each of them using their own questionnaire and required data sets.
So far, the data collection and management process of climate-relevant information has been primarily one thing: one-sided. Suppliers lack support, very little transparency is given on how the data is being used and feedback on improvements, best practices and benchmarks is missing. The focus on the really important things gets dismissed: working together on putting climate goals into practice and reducing emissions.
The Platform to Engage Suppliers in taking Climate Actions
This is where the Climate Intelligence Platform from THE CLIMATE CHOICE comes in. We offer the first climate-focused data platform to enable collaborative decarbonization along the supply chain.
Supplier engagement requires tools and resources for companies of all sizes and industries in order to support them to streamline, improve and report their holistic climate performance. Our platform offers such an easy-to-use tool to collect climate-relevant data along the 5 dimensions: The data-driven Climate Performance Assessment. It allows to collect, analyse and manage the primary data of suppliers comparable, machine readable and of high quality. As a result, all data points are summarised in individual company climate scorecard, and can be used as a transparent basis for joint climate actions.
The Lack of Easy-to-use Tools Prohibits Supplier Engagement
Today very few suppliers have had the resources to set up such a holistic climate management system in order to manage and disclose the required data. Therefore, driving decarbonization along the supply chain requires a data-driven structure to harmonize buyers’ requirements and simplify supplier engagement on climate.
How it works – Scaling up Supplier Engagement
Our climate performance assessment method therefore works with a scaleable data approach, providing easy usability and scalable process for suppliers of any industry and size. Doing so, the assessment records 25 key management indicators in the five dimensions, with up to 150 machine readable data points. The respective primary data is recorded in an online questionnaire, which can be completed in about an hour. Important documents, sources and certificates are uploaded and stored on our platform. The data is then compared with third-party data and external certification can be made available via interfaces. As a result, the collected, validated data can be securely shared with business partners via the platform.
Share information securely via the Climate Intelligence Platform
Supplier engagement does not stop with data evaluation, our focus lies on cooperation and climate protection. Thus, every company going through the Climate Performance Assessment receives benchmarks to industry peers, best practices for improvements and suggested measures for decaronization. As well as access to our data platform, in which previously evaluated companies and climate-compatible suppliers can be found, enabling companies to transform holistically through climate relevant procurement decisions.
Focusing on Supplier Engagement requires SME friendly Tools
Our platform supports small and medium-sized companies in particular. They often lack the resources to set up their climate management holistically, to compete through their climate performance and can hardly take advantage of new climate-related market opportunities. This is why, we recently launched our Climate Readiness Check. This easy 5-min Self-Test allows companies of any size and industry to understand their climate maturity level, benchmark with peers and discover best practices to improve. Using the Quick-Check, suppliers gain access to our Software-Platform. They can use it to share their data safely with customers – in order to align and engage in their climate strategy.
Making it happen
At THE CLIMATE CHOICE, we support purchasing companies with transparency and comparable primary data from their own supply chain. We provide a unique tool to actually make a collaborative supplier engagement approach for decarbonization possible. Doing so, we empower the implementation of climate goals within the supply chain with the necessary speed and collaborative work.
This is how we fulfill our mission step by step. Transforming every company into a climate champion and building together the regenerative economy of the future!
Get in touch to set up your Supplier Engagement Program
Your company strives to become climate ready? Start your Climate Readiness Check now! In our Beta Phase, free of charge for a limited time.
You are leading your supply chain transformation? Great! Get in touch with us and find out how our platform approach supports your decarbonization supply chain efforts.