Decade of our Lives webinar series wrap up: seven sustainability insights from our audience
Our Decade of our Lives webinar series saw us invite procurement, sustainability, and supply chain leaders from global enterprise businesses to weigh in on scope 3, climate change, and sustainable procurement for an audience of their peers. During each session we asked our audience of professionals for their opinions, too. With survey results drawn from over a thousand of those attendees, we’ve put together these insights into the chief challenges and opportunities facing us around climate, carbon, and supplier sustainability.
The Decade of our Lives: Climate, collaboration, and the scope 3 challenge
With every five weeks that pass, we edge another 1% closer to 2030, and with it the end of the most important decade of our lives for the climate crisis and our sustainability efforts more broadly. At time of writing, it is predicted that we already have a 50% chance of exceeding the 1.5°C warming limit set out in the Paris Agreement before we even reach 2030. Failure to limit catastrophic global warming will put millions of people at risk of adverse weather events, crop failures, water shortages, rising sea levels and more.
To limit continuing climate change, large businesses have a huge role to play. In recognition of this fact, most enterprises now have 2030 or 2050 Net Zero targets. But with the majority of their impact on the natural world and 80-90% of their emissions sitting in their value chains, they cannot make an impact alone.
As a result, procurement and supply chain functions are growing in importance, stepping into a pivotal role driving the sustainability agenda. It’s those professionals – in procurement, sustainability, sustainable procurement, and supply chain – that we invited to share their insights during our Decade of our Lives webinar series over this past year.
In addition to our senior procurement and sustainability speakers (including CPOs and CSOs, coming from the likes of Heineken, Unilever, Novartis, TetraPak, Johnson & Johnson, Bayer, and more), we were joined by an audience of over 1000 attendees across the series – the majority of them procurement, supply chain and sustainability professionals working at large enterprise organisations, too.
We realised this was a great opportunity to get some insights into the concerns of these professionals as they work to deliver on their organisations’ sustainability goals. So to get a better understanding of the challenges and opportunities they are facing, we surveyed them all.
Here we have put together an article that summarises the answers to key questions around scope 3, Supplier Collaboration, stakeholder engagement, and the broader sustainability agenda.
If you were one of the attendees who joined us during this series, we’d like to say a huge thank you for your input and your excellent questions. And if you couldn’t join us at the time but would like to catch up on what you missed, you can access all recordings of these webinars here.
Difficulties reducing scope 3 emissions
As our first question, we asked where our audience experiences the most friction trying to reduce scope 3 emissions.
From the answers above, we learned that the majority share (42%) of sustainability and procurement professionals in our audience find that difficulty monitoring and measuring scope 3 emissions is their key barrier to action. Lack of alignment with suppliers (20%), lack of tools, processes or understanding in the business (15%) and unclear responsibilities (7%) make up the rest of the answers in what was a fascinating poll to watch evolve over the course of the series.
Difficulty in monitoring and measuring, in our experience, usually comes down to organisations thinking they need to get perfect data in order to get an accurate picture of current performance before they can begin reducing their emissions. However, the advice from almost all our Decade of our Lives panellists has been to not wait for perfect data, and instead to start working today with the data you have. Ultimately, action beats inaction every time.
“A lot of [baselining] work, in many organisations, is done using literature-based data,” said Anke Hampel, Global Innovation & Sustainability Director at Tetra Pak. “This is an industry average, which I use because – in the absence of other data – I have to start somewhere.
“So while aligning what suppliers’ emissions look like and what they are reporting is key, you can get started without this. A more important thing to do is set a target. Then you can dive into the numbers.”
The good news is that Vizibl’s Supplier Sustainability Management module, as part of the wider Vizibl platform, helps you to overcome this analysis paralysis. Monitoring and measuring supplier sustainability performance is easy, with integrated CDP and SBTi frameworks giving you an at-a-glance overview of individual supplier progress, plus you have the ability to create your own custom frameworks if you have specific additional requirements. From there, you can align your suppliers around measurable targets, collaborate on projects to deliver against key objectives, and transform unsustainable categories into brand new opportunities.
The next sustainability priority
For almost half of our audience, water security (43%) is regarded as the next crucial factor that procurement and sustainability professionals must turn their attention toward in the new year and beyond. As one of the three CDP reporting categories, alongside climate and forests, it is a crucial aspect of sustainable procurement.
In CDP’s May 2022 report, High and Dry: How Water Issues are Stranding Assets, 69% of listed entities that disclosed via the platform reported that they are “exposed to water risks that could generate a substantive change in their business.” The imperative to include water security in our enterprise-wide ESG programmes has never been clearer.
Audiences were secondarily concerned with modern slavery (20%), equality (16%) and deforestation (15%), another three major supply chain issues which need to be addressed urgently in order to create a more sustainable and egalitarian future for everyone. Removing modern slavery from business practices already has some legislation around it, including the UK Modern Slavery Act which has both jail terms and large fines of up to £20 million for companies found to have indentured people in their supply chains.
Although responsible for around 10% of global warming, deforestation isn’t currently covered by a great deal of binding legislation on a global scale. Things are moving in a positive direction, however, with the world's 14 largest food trading companies, including Cargill and Bunge, detailing a plan at the recent COP27 to eliminate deforestation from their supply chains for soy, beef, and palm oil by 2025.
When it comes to stakeholders demanding better sustainability performance from large enterprises, pressure is coming from all angles.
An equal number of our audience answered that internal stakeholders feel pressure from consumers (35%) and investors (35%) alike, with a lesser but still significant demand for sustainable practice coming from regulators and governmental bodies (22%).
The pressure consumers are increasingly putting on companies to be more sustainable has been well-researched; for example, global market research firm Mintel found that consumers are increasingly seeking out products with labelling labelling that highlights environmental impact, such as CO2 emitted, litres of water used, or distance travelled in kilometres. Additionally, 41% of consumers report that they are also looking at packaging for recognisable certifications before buying.
Meanwhile, investor pressure has also been a factor for some time, and is increasing as we move through the 2020s. CDP has been bringing together asset owners, asset managers, banks, and insurers to engage with the companies in their portfolios over environmental disclosure and action.
This pressure will not go away. Procurement and supply chain must use their position to urgently improve their organisation’s ESG profile, or face the consequences from a number of different stakeholder groups. Our following question demonstrates its importance…
Threats to the business
So while procurement and supply chain professionals feel the pressure equally from both consumers and investors, they feel their business is under greater threat from reputational damage amongst consumers than anything else. As we saw with the Shell ruling in May of 2021, however, increasing legal and regulatory pressure is also a risk; one that perhaps should have ranked more highly.
Reputational damage amongst customers is most likely to come from corporate greenwashing – a topic that arose recently at COP27 in Sharm El-Sheikh, Egypt. In fact, a report entitled Integrity Matters, written by the UN’s High‑Level Expert Group on the Net Zero Emissions Commitments of Non-State Entities, recommended that “a Task Force on net zero regulation” should convene “a community of international regulators, covering all industries, to work together towards net zero.”
"Too many of these net-zero pledges are little more than empty slogans and hype", group chair and Canada's former environment minister, Catherine McKenna, said during a news conference launching the report. "Bogus net-zero claims drive up the cost that ultimately everyone will pay."
Delivering on our goals
On a more positive note, 62% of our audience answered that they believe their organisation is on track to meet their future sustainability targets with the solutions they currently have either planned or in place.
But naturally, this is a subjective question – whether their organisation as a whole is taking sufficient action yet is another question. 2030 may feel like a long way away, but we are quickly marching towards it. If enterprise organisations want to successfully meet these GHG emissions reduction targets, they need to be collaborating with supply chain stakeholders now.
Additionally, even if all these companies do meet all their targets, the global “net zero by 2050” target called for in the Paris Agreement means that worldwide emissions need to be reduced by 45% by 2030, and reach net zero by 2050. The reality is that we need more than 62% of companies to be on track if we are to have any hope of meeting that goal.
To help the remaining 38% get started, Vizibl’s Sustainable Procurement 2030 Guide provides an overview of some key sustainable procurement priorities, along with looking at the benefits that sustainable procurement initiatives will bring to the organisations who launch them successfully, and alerting readers to some likely barriers to look out for along the way as we continue on in the most important decade of our lives for our planet and its people. It’s available right now as a free download, and will really help to kickstart your journey to net zero.
Supplier sustainability monitoring
The majority of our attendees (71%) responded that less than 100 of their suppliers are being monitored in regards to their emissions.
And, although it initially seems like a worrying percentage, it ultimately makes sense. In many instances, the majority of scope 3 emissions will sit in a relatively small percentage of your overall suppliers, all of which will most likely be in tier 1.
PwC, in collaboration with The Climate Group, found that 80% of an organisation's supply chain emissions can come from just 20% of its total purchases – most of which could, in theory, come from just a few suppliers.
In one case, a company reported that just 20 suppliers were responsible for 94% of its scope 3 emissions. As a company in this position, focusing on a smaller subset of your supplier base makes sense, because reducing the impacts of just those few suppliers could bring the organisation’s overall emissions down significantly whilst keeping project scope small initially.
Scope 3 & supplier collaboration
To finish off the survey, the Vizibl team asked our participants about their future plans for Supplier Collaboration on scope 3. The highest proportion (40%) responded that they are planning to collaborate with less than 10 suppliers, with 37% of our participants planning to collaborate with 10-20 in their value chain, and the remainder answering that they are planning to collaborate with considerably more.
Similarly to the point above, there are certainly silver linings to be taken from this information. Most emissions will sit with a proportionally small number of an organisation’s suppliers, so starting small and getting the most “bang for your buck” to begin with certainly makes sense before scaling an emissions reduction programme more widely.
Regardless of the scale of current efforts, it is great to see that our audiences are planning to engage collaboratively with their suppliers on emissions reductions; given that it is unlikely that any business (let alone a global enterprise) can entirely re-source in order to find more sustainable solutions, this post-contract work with incumbent suppliers is absolutely essential.
The decade continues
Since we started this series just over a year ago, we’ve welcomed thought leaders and industry heavyweights to discuss procurement’s role in the most important challenge we have faced in modern times: the sustainability crisis. Procurement, sustainability, and supply chain experts all weighed in to discuss how best to take action today to help reduce anthropogenic GHG emissions and move the corporate world towards Net Zero. Yet the series would not have been possible without you – our audience – and the insightful answers & feedback you have given us.