Overview: 

Cop27, the latest edition of the Conference of Parties on climate change, took the usual gathering of Politicians, CEOs, Environmentalists and diplomats from Glasgow to the (slightly warmer) Red Sea Port of Sharm El Sheik.   The aim was to build on the commitments made In Glasgow and make a tangible difference to the current climate change trajectory.  

 COP27 

As Is usual, the opening salvos of Politicians and World Leaders open the event with high level and well meaning Intentions.   The real work kicks off once melee of Leaders get back on their planes (a sail boat would be preferable) and leave the negotiators to see whether they can thrash out additional commitments.   The overriding aims remain the same: 

1. A) Urgently reduce Greenhouse Gas Emissions
2. B) Building Resilience 
3. C) Adapting to the Impacts of Climate Change
4. D) Delivering on financial commitments to finance climate action in developing countries. 

Unlike COP26, this conference appears to some extent become mired In that last point; the financial commitments of developed nations to finance climate action In poorer countries.   There appears to be a lack of consistency In what each country needs (to the point the options are being referred to as a ‘mosaic’ of finance options) and a willingness of those footing the bill wanting to (In some cases not being able to) contribute.   The UN chief has already flown back from Bali (G20 Conference) to tell the negotiators to ‘stand and deliver’ In a last bid to push through some agreement.  We will wait and see the outcomes.  

Road to Net Zero 

The challenge we all face to keep Global warming to no more than 1.5 degrees means as businesses and corporations we need to deliver a reduction in GHG emissions of 45% by 2030. The World Economic Forum is clear in Its view that Procurement teams will be vital in delivering the need to control and manage Emissions generated within business value chains.  

As organisations start to accelerate their emissions measurement and management they soon recognise that the early reductions made within Scope 1 and 2 can be a small percentage of their overall emissions profile.   

Over 75% of emissions can be generated within indirect ‘Scope 3’ supply chain network 

This Is Interesting as It Is often where knowledge, access to data and visibility becomes a lot more murky particularly as a lot of  Be able to quantify the Scope 3 emissions Is reliant upon third parties ‘beyond your operations‘.   With the entangled web of global supply chains, this can really reach companies In all corners of the World where access to this kind of data Is difficult.  

Quantification

The Power of the supply chain functions and their sourcing strategies will be vital if companies are going to deliver their Environmental commitments for their stakeholders. Although, Scope 1 and Scope 2 commitments are a relatively simple starting point to measure and manage emissions downwards.

However with the vast majority of emissions being generated in the downstream indirect elements of the supply chain, companies have to rapidly get to grips with the both the opportunity and complexity of Scope 3. If this Is done correctly, the results can certainly have a positive Impact on that ‘net zero’ target for a company.

The key Is establishing a base line. Often, we have seen companies looking to get Into such granular detail that they miss the objective of the exercise. For example, there Is little point trying to get Information on a 30 year old Jinbei van In China, that ships partially completed garments between sewing facilities, to calculate the emissions applicable to the 10 mile drive when you ship 60 CBMs of shoes via air from Shanghai to Los Angeles. It Is a case of diminishing returns at that level of detail. The focus needs to be on the most Impactful factors as a starting point.

Transformation

As GHG Emissions increasingly becomes a key factor with sourcing strategies and the partners selected within the supply chain, it brings with it an increase in complexity and a range of new skills and tools that are required to make positive environmental choices.

The key elements required to transform sourcing strategies Include:

1.Visibility

Creating visibility of the emission data across your supply chain is clearly vital in management and making positive choices. The real power comes from sharing data with supply partners and identifying emissions that need to be tackled first in any intervention planning.

2. Partnerships

 Creating partnership across your supply chain with companies who are undertaking a similar shared journey towards emissions control will make the process easier.  For many years, we have talked about the value of partnering with the right suppliers and this Is now even more relevant given the data extraction requirements.

3. Shared future vision

 As the focus on procurement/sourcing teams builds to deliver service, quality, cost, agility, and resilience together with the overarching emissions management and control, working with supply partners with a shared future vision will become central to effective delivery.

Summary

Supply chain functions and sourcing strategies will Increasingly have emissions management high on their agenda.  This will require companies and organisation to rapidly build networks of partners both in the their current supply chains as well as from new supply partners.  The huge increase in data collection and management will be a large burden on many companies who are not currently structured to manage this challenge.

The collection management and decision making to manage and reduce Emissions will be of critical importance in the immediate future to rise to the challenge of keeping Global Warming to no more than 1.5 degrees.   Although, there are questions that still need addressing over the consensus at COP27, there Is no doubt that companies and organisations will have to be ready.

Emissions Measurement and Management

 ET2C Is a global sourcing company with over twenty years’ experience working with our clients on their sourcing strategies.

We are currently rolling out our ET2Carbon tool that enables our clients to create visibility of GHG Emissions in their indirect supply chain (Scope 3). This will enable emission hotspot identification and management across your supply chain partners.  We aim to build visibility, measure emissions, and set out the ability to reduce the GHG emissions year on year.

If you would like to know more please contact us at contact@et2cint.com.

Sustainable global sourcing, even with the Immediate concerns of Inflation and the Increased cost of living, remains Important to any business over the long term.

Overview

 Sustainable global sourcing remains important for all companies’ supply chains, even though we are living through times of huge turmoil.  The events of the past few years have brought huge changes to our lives due to the Pandemic, the war in Ukraine and both inflationary and recessionary pressures across global markets. These events have ushered in significant challenges for business, requiring both a short and medium term response.

However, many of the most severe, long term, risks facing Business are driven by environmental factors. Factors that were effecting us before Covid and still have the potential to pose a significant threat to long term business stability.

• Climate action failure
• Extreme weather events
• Biodiversity loss

The World Economic Forum’s global risk register is clear in their assessment of the global risks. Five of the top ten are linked to the environment.

Our commitments to Sustainable Sourcing

 As a leading global sourcing company with offices in seven countries and over 20 nationalities working within our organisation, we have a very global outlook.   As a team we have worked to align our business around a future where good business can be good for business.

“instead of simply trying to do less harm we should aim to do some good”  Ellen MacArthur Foundation.

Our Vision is to deliver Growth with Purpose

 A central part of our vision is to define our sustainability roadmap, identifying how we can play our part in the global challenges outlined by the World Economic Forum and the United Nations in their Sustainable Development goals.

Our roadmap to sustainable business is built upon two pillars

• Reducing our GHG emissions by 20%
• We will be a Zero accident in our business
• Development plans in place for all our colleagues
• % of profits invested in community project

• We will be a Zero accident in our business
• Development plans in place for all our colleagues
• % of profits invested in community projects
• We will support colleagues Volunteering days

Our Strategic Vision

Our sustainability plan is central to delivering our Vision and our Strategic Growth plan through to 2025. It is a bold ambition to better serve our clients, our partners, our colleagues and the local communities that we are both a part of as well as impact.

It reflects our combined ambition as a team of 250 colleagues across the World.  To work for a business that has a strong and clearly defined ambition to deliver sourcing in the right way.

Unlocking the value for stakeholders in the extended supply chain, we recognise that only by working collaboratively with all our partners, clients, suppliers, colleagues, and local communities can we start to play our part in overcoming the global challenges we all face.

The Drive for More Sustainable Sourcing

We recognise the increased need to define, measure and take action on the impact of supply chains on sustainability targets.

As sourcing leaders continue to deal with the regular challenges of delivering quality and price within the context of global trade turmoil, they are increasingly having to wrestle with the increasing challenge of sustainability targets.

For companies of all sizes, serving all markets there are increasing questions from their customers, consumers and clients. Not just about the cost of their

products but of the environmental and societal cost and impact in the manufacturer and distribution.

Answering these questions requires a newer more unique set of skills to measure and define targets and to work with the full value chain to take effective action in a transparent way.

For most companies the central element of their environmental commitments will be to reduce their Greenhouse gas emissions (GHG) – particularly on the back of COP26 and Carbon Emissions.  Scope 1 and Scope 2 emissions tend to be easier to get to grips with as there are fully within companies control.

At Scope 3 level the challenge becomes harder and simultaneously bigger. Many companies typically seeing 95% of their GHG emissions being created within scope 3.

Conclusion

 Building a more sustainable supply chain for many organisations will start with emissions measurement. Creating successful interventions will require collaborations with like-minded partners throughout the value chain and the measurement tools to effectively identify emissions creation and hot spots.

The journey towards sustainable business is one built on partnership, transparency and shared goals.

Supporting Your Journey to Sustainable Sourcing

 As a leading global sourcing company, with over twenty years’ experience supporting our clients develop and deliver their sourcing strategies.  We are here to support you with all your sustainable business tracking needs. Emissions tracking, social and ethical audit.

For more, email us at Contact@et2cint.com.