How to reduce suppliers’ carbon footprint?

As the effects of climate change are starting to occur, they increasingly impact our economy. All sectors of society need to take action to reduce emissions. Every business has the power to lower its greenhouse gas (GHG) emissions and can play a crucial role in mitigating the impacts of climate change. A significant portion of your carbon footprint comes from the products sourced from your suppliers. By fostering collaboration within your organization and with suppliers, you can uncover innovative solutions to cut emissions and achieve our collective reduction goals. Here are some inspiring tips for lowering your suppliers’ carbon footprint.

1. The Role of Suppliers in Your Carbon Footprint

1.1 Understanding Supplier Carbon Dependency

Have you ever heard of supplier carbon dependency? This concept refers to the link between a company and its suppliers regarding carbon footprint. It represents the amount of greenhouse gas (GHG) emissions indirectly emitted by a company due to its suppliers’ activities. Your business is indeed strongly linked with suppliers especially when it comes to carbon footprint. And they are linked to yours. These emissions fall in the Scope 3 emissions of your company.

Here’s how it might look for your company:

• Raw Material Purchases: Emissions from the production of raw materials purchased from your suppliers. For example, if a company buys steel, the carbon footprint from the steel’s production (mining, refining, etc.) is included in the supplier’s carbon footprint.
• Transportation and Logistics: Emissions associated with transporting products between suppliers and the company, whether by land, sea, or air.
• Component Manufacturing: When suppliers manufacture parts or components for the company, the emissions from this production are also included.
• Energy Use by Suppliers: If suppliers use high-carbon energy sources (like coal or oil), this increases the company’s total carbon footprint, even if it doesn’t directly use these energy sources.

1.2 Collaborating to Reduce Supplier Carbon Dependency

The company is thus dependent on its suppliers’ carbon emissions, which limits its own reduction efforts if your partners don’t take similar actions. To reduce emissions throughout the supply chain, companies can:

• Choose more sustainable materials.
• Opt for less polluting modes of transport.
• Help suppliers transition to renewable energy sources.

This concept is crucial in businesses’ sustainability strategies. To achieve carbon neutrality or emission reductions, it is often necessary to reduce indirect emissions related to suppliers.

2. Sustainable Sourcing Strategies: How Can Companies Adapt?

2.1 Life Cycle Assessment (LCA)

A key tool for assessing these impacts is the Life Cycle Assessment (LCA). LCA measures the overall environmental impact of a product, from raw material extraction to its manufacturing, distribution, use, and end-of-life (recycling or disposal). It takes into account several factors:

• Greenhouse gas emissions,
• Energy consumption,
• Waste generation,
• Natural resource usage, etc.

LCA identifies stages in the product life cycle where improvements can be made to reduce the supplier’s carbon footprint. This approach is essential for guiding strategic sourcing decisions and fostering eco-innovation.

2.2 Practical Practices for Sustainable Sourcing

In addition to using LCA, here are some practical steps to reduce the carbon footprint of your purchases:

• Select local suppliers to limit transportation-related emissions.
• Choose eco-friendly or recycled materials to minimize environmental impact right from the product design stage.
• Evaluate environmental impacts at each step of the value chain, helping to identify levers for reducing emissions from production to distribution.

2.3 Key Questions to Evaluate Supplier Environmental Commitment

To ensure sustainable sourcing, it’s wise to include environmental criteria early in your meetings with suppliers. Here are some questions to ask to assess their commitment:

• Are the materials used in your products recycled or recyclable?
• Have you conducted a carbon audit? If not, do you plan to?
• What are your practices to reduce the environmental impact of your operations?

Asking these questions at the outset helps measure the supplier’s commitment to environmental issues and opens the door to constructive dialogue about your sustainability needs, guiding more informed and responsible purchasing decisions.

3. The Importance of Understanding Product Manufacturing Stages

To reduce your supplier’s carbon footprint, it’s essential to understand the manufacturing stages of your products. This includes not only raw material production but also how they are processed and transported. Understanding the manufacturing process allows you to identify areas for improvement and work more effectively with your suppliers to reduce carbon emissions.

Responsible Materials:

Replace virgin raw materials with more environmentally friendly alternatives. For instance, Decathlon incorporated secondary materials into its products to limit the environmental impact of its supply chains. These secondary materials can come from both recycled and reused sources.

Optimizing Resource Quantity:

Reduce the amount of resources used by optimizing your products, which reduces the intensity of material flows between you and your suppliers.

Optimizing Energy Consumption:

Ensure that your suppliers adopt energy-efficient technologies and practices, which can help reduce emissions associated with manufacturing.

4. Actions to Reduce Emissions in Collaboration with Your Suppliers

4.1 Responsible Sourcing and Supplier Selection

The first lever for reducing supplier carbon dependency is sourcing — finding suppliers who share your values and are committed to reducing their emissions. Select suppliers who have robust carbon footprint reduction strategies, which may include a full carbon audit and energy transition plans.

4.2 In-depth Product Analysis

To go further, conduct an in-depth life cycle analysis of the products you purchase. Identify elements or processes that generate unnecessary emissions, and work to eliminate or replace them with lower-carbon alternatives.

It’s also crucial to keep an eye on innovations in materials and manufacturing techniques, allowing you to integrate low-carbon solutions as soon as they emerge and proactively adapt to technological changes to reduce environmental impacts.

4.3 Training and Ongoing Evaluation

It’s essential to train both your teams and your suppliers on the importance of sustainability and Scope 3 emissions. This training should cover best environmental practices, optimizing production processes, and innovations in emission reduction.

Simultaneously, establish continuous evaluations to track your partners’ progress and adjust your purchasing criteria based on their environmental performance. Encourage the sharing of best practices and successes among your partners to foster a culture of collective improvement. By promoting collaboration, you strengthen everyone’s commitment to a greener supply chain.

Conclusion: Reducing Suppliers’ Carbon Footprint, a Key Leverage for a Sustainable Supply Chain

Reducing the supplier’s carbon footprint goes beyond regulatory or ethical requirements. It represents a real strategic opportunity for businesses wishing to combine economic performance with environmental commitment. By closely collaborating with your partners to identify sustainable sourcing practices, LCAs, and eco-innovation, you can reduce Scope 3 emissions while strengthening your supply chain’s resilience.

At Sustainscale, we specialize in carbon footprint assessment, and, in partnership with Lolita Vérité, a sourcing strategy consultant, we assist you in optimizing your processes. Together, we identify the best practices for selecting responsible suppliers and integrating low-carbon solutions into your operations.

Contact us today to discover how we can help you reduce your emissions and improve your environmental performance.