Business giants call on corporates to halve value chain emissions by 2030

The average company’s supply chain emissions are estimated to be around five-and-a-half times greater than those generated by their direct operations

The 1.5C supply chain leaders is a collaborative platform for businesses striving to cut emissions sharply across their supply chains, which was launched by a string of big businesses including BT, Unilever and Ikea.

The Exponential Roadmap Initiative was launched in September 2020, as part of the Race to Zero campaign, with Ikea, Unilever, BT, Ericsson and Telia named among the founding corporate members of the 1.5C supply chain leaders. This scheme, and its other workstreams, are supported by the We Mean Business coalition.

Since then, the likes of technology giant Telefónica, food manufacturer Nestlé and waste management firm Ragn-Sells have all joined the initiative. Today. The initiative represents $440bn in annual revenue.

To mark what is meant to be the final day at COP27 (although negotiations may well extend into the weekend), the businesses have issued a joint declaration, calling on other corporates to join them in efforts to decarbonise the value chain.

“We, the 1.5°C Supply Chain Leaders in the Exponential Roadmap Initiative, have set targets  and are taking action to cut our own emissions by at least 50% by 2030 as outlined in the 1.5°C Business Playbook. But we recognize that we need to go beyond our own operation and contribute to the global transformation towards net-zero,” the declaration states.

“Climate targets and actions in line with science are expected to become the new business as usual to stay competitive and to stay in business. The 1.5C Supply Chain Leaders now encourage all companies and suppliers to do the same – to gain a competitive advantage, and to contribute to the 1.5C ambition. We know it is a massive effort, we know it has to be done, we know it is achievable and it has to be done together. We Can Do It.”

For most large businesses, indirect emissions from the supply chain and/or consumer use of products and services will account for a far larger portion of overall emissions than those from direct operations. CDP estimates that the average large firm will have supply chain emissions 11.4 times greater than its direct emissions, so decarbonisation here will be vital for credible climate plans.

The number of companies calling on their supplier to disclose environmental data to CDP increased by 24% between 2019 and 2020.

Supply chains can often be ignored by corporates, with many targeting decarbonisation across Scope 1 and 2. While frameworks like the Science Based Targets initiative do require Scope 3 targets if emissions from that area account for more than 40% of the total, it is still an overlooked area of action.

Even, the World Economic Forum (WEF) is urging businesses to do more to tackle their supply chain emissions and has published new advice on how to do so.

The report from WEF outlines the trend towards reconsidering geographical sourcing strategies to minimise emissions from transport. Many businesses have consolidated supply chains considering the impact of Covid-19, or to avoid hotspots for deforestation.

At COP26, the 1.5C supply chain leaders launched a 1.5C supplier engagement guide, published by the Exponential Roadmap Initiative – a scheme set up to help companies, cities and nations to back up long-term climate targets with plans to at least halve emissions by 2030.