At South Pole, we see a growing number of bold commitments to drive climate change through the supply chain. Where scope 1 and 2 were once the primary focus to reduce emissions, it's becoming clear that we will not be able to achieve the reductions we need unless organisations push hard to drive change throughout their value chains as well. Where should you begin? Let's start somewhere with great potential to make a strong impact at the right pace: the agricultural processes along your value chain.
I know what you're thinking: “I have a million smallholder farms in my supply chain, how can I get all of them to change?" It's hard to know what the best actions are to meet your science-based and net zero targets, or even how to start on your path towards climate neutrality. But there is always somewhere to start. Here's a checklist on how to drive sustainability in your supply chain, whether you are just getting started or upping the ante on your current climate journey.
Take a moment to ask yourself: where are you buying from? What impact do your purchasing decisions have on the planet? This is a complex question, but getting to the bottom of it will allow you to address the biggest issues first and make the largest impact. Digging deep into where you source your raw materials from will allow you to identify your main hotspots, i.e. where most of the emissions along your supply chain are coming from. By understanding where the emissions are coming from and - importantly - which practices are driving these emissions, you will be able to identify the key levers to pull to achieve the most reductions. With this knowledge in hand, you know where to get started.
Acknowledge that you cannot do this on your own. You need to engage with your suppliers to work collaboratively in driving improved practices at the farm level. Work to understand how your process and review criteria can support transformative practices in your value chain. For instance, how can you leverage your supplier selection process as a tool for change? For example, take a look at your regenerative agriculture options, the new movement with a net positive environmental impact.
When we say you cannot do this on your own, we really mean it. Engaging with suppliers is crucial, but transforming the way business is done across an entire sector is best achieved when everyone works together for the greater good. Collaboration - even with competitors - might just be necessary to drive change. For example, do you share suppliers with other competitors or actors in a different industry? This could be an opportunity to join industry groups to discuss change in a non-competitive environment. Don't stick to your own garden, but be aware of the whole ecosystem and look for opportunities where you can accelerate change by initiating a conversation and building bridges.
One of the main roadblocks in many organizations is that sustainability efforts are not yet fully integrated into business decisions. This challenge to use climate impact and process innovations as new ways of differentiating products is actually a hidden opportunity to ask questions about how different processes can support your organisation in reaching its climate goals. For instance: when developing a new product, does your team consider what the climate impact of certain raw materials will be? When selecting a new supplier or assessing a new sourcing region, how can the sustainability profile be taken into account in the decision-making process? How can you turn conversations about reducing emissions into an engagement tool to bring renewed energy and drive innovation within and beyond your own company? An example could be using the climate impact of your raw materials as a point of differentiation to drive commercial performance.
Defining targets that are backed up by science is an essential step to align your efforts with a global future of 1.5°C. But targets are only a part of the battle. Taking the time to create a robust plan is equally essential, even when there may be pressure to meet an ambitious set of targets as quickly as possible. Identifying key hotspots, defining the interventions to achieve reductions, and engaging with suppliers and other stakeholders all takes time, but a solid plan can guide you through the process. A great source of inspiration is the net zero roadmap we helped create with Nestle.
Even after your plan is in motion, don't stop the momentum there. Look ahead and consider more ambitious interventions that may take more time but can yield greater reductions in your value chain. Regenerative agriculture practices and innovative uses of existing raw materials can unlock untapped synergies that you might not have identified previously. There may even be opportunities for removals with practices such as insetting, which can integrate offsetting efforts within your own supply chain.
Taking action to reduce emissions along your agricultural value chain can be a challenge, but the benefits can be significant. Have you taken a closer look at your value chain? Do you have a plan? It's never too late to begin. And if you're still not sure where to start, that's where South Pole comes in.