Innovative, deeper partnerships between businesses and their suppliers can play a vital role in bringing value chain emissions down faster and more equitably.
There is growing focus on value chain (scope 3) emissions as the next frontier in the race to net zero, and businesses increasingly talk of partnerships with suppliers as essential to meeting ambitious climate targets. Upstream and downstream emissions present too vast a challenge for any business to tackle alone, typically representing a sizeable chunk of a corporate greenhouse gas (GHG) footprint- Kraft foods estimate that value chain emissions comprise more than 90 percent of the company’s total.
Supplier emissions are considered easier for a business to influence than downstream emissions such as those related to customer product usage. Brands with significant purchasing power can set minimum standards for organisations wishing to supply them, and there is no doubt that building carbon reduction commitments into procurement processes will continue to play an important role.
And yet. In relying solely on conventional procurement power dynamics to enforce supplier emissions reduction targets, are we missing a trick? This approach, taken alone, risks forcing suppliers to cut corners, tick boxes and, if the barriers to compliance are too high, falling off the roster or continually failing to meet commitments. From a climate justice perspective, it can be problematic, as suppliers may pass the costs of compliance onto smaller organisations along the value chain less able to absorb the burden, with knock-on effects on livelihoods.
A more genuinely collaborative approach is needed to creatively address challenges suppliers face in cutting emissions. At The Partnering Initiative (TPI), we define a partnership as an ongoing collaborative relationship between or among organisations from different stakeholder types aligning their interests around a common vision, combining their complementary resources and competencies and sharing risk, to maximise value creation and deliver benefit to each of the partners. A true partnership involves each party bringing something unique to the table that allows the collaboration to achieve more than the sum of its parts- the ’collaborative advantage.’. A business requiring its supplier base to complete a GHG questionnaire is not, under this definition, a partnership. It is primarily a transactional relationship, and, crucially, it continues to heap risk and obligation onto the supplier, often for minimal reward. Such tactics can only achieve so much.
Is it even possible to work in deeper, genuine partnership with suppliers on net zero alongside a parallel commercial relationship? I see encouraging signs that it is, and that there are many advantages to doing so.
Three primary scope 3 partnership models are emerging:
- Businesses working more collaboratively and equitably with suppliers
Having set a target to halve scope 3 emissions by 2030, Diageo is working across its value chain, providing a fund to support new approaches to regenerative agriculture and running training programmes for smallholder farmers on low-emission farming methods. By acknowledging and jointly addressing the practical barriers smaller suppliers and farmers face in reducing emissions and adapting to climate risk, businesses can support livelihoods and go some way to redressing the power imbalance that can hinder net zero value chain ambitions.
- Businesses collaborating with industry peers
Unilever is collaborating with industry peers and common suppliers to bring down value chain emissions faster and save the considerable administrative burden of multiple different emissions reporting systems. Recognising that the scale of the challenge requires new thinking, the company states that achieving climate goals “will require new levels of collaboration with suppliers who are as ambitious as we are.” Accepting that this work can be challenging for smaller organisations without dedicated sustainability teams, Unilever and peers at the Exponential Roadmap Initiative have set up an SME support service to provide dedicated GHG guidance and tools.
- Businesses directly supporting supplier collaborations
Nestle and Starbucks are key corporate partners of the dairy industry’s Net Zero Initiative (NZI), a collaboration of dairy organisations to advance research, on-farm pilots and new market development to make sustainability practices more accessible and affordable to farms of all sizes. Collective action and practical support for small scale farms are central principles.
Imagine how much faster we could we go if all businesses sat down with their suppliers as genuine partners on the net zero journey. New, collaborative models are gathering steam, and it seems certain that a deeper partnership mindset- and skillset- is needed, where businesses invest in jointly tackling barriers for suppliers at the sharp end of the net zero transition.
We welcome thoughts on this article- particularly if you have examples of scope 3 net zero collaborations working particularly well, or businesses that have successfully addressed the balance of power to work in genuine partnership with suppliers to address value chain emissions. Je***********@tp*******.org">Contact Jenny Ekelund
TPI is one of the world’s longest-established organisations dedicated to multi-stakeholder partnering. Born out of a collaboration between the University of Cambridge and the International Business Leaders Forum, it has been at the forefront of the drive towards collaboration between different sectors of society for two decades. During this time, TPI has worked extensively with the UN, business, civil society, and philanthropic foundations to maximise impact through effective partnering. Our guidebooks and tools to support effective partnerships are free and available to all.
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 The GHG Protocol Corporate Standard classifies a company’s GHG emissions into three ‘scopes’. Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased energy. Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.
 For those with an appetite to examine the power imbalance inherent in a commercial relationship and consider what it would take to meaningfully partner with suppliers to accelerate net zero ambitions, TPI’s open access tool on managing power imbalances in partnerships (see page 88) could be a useful resource