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Collaboration can help identify best solutions to reach carbon neutrality 

Reducing emissions in global supply chains will be critical if the world is to meet the key target set in the Paris Climate Agreement - keeping global warming to 1.5C or below.  

Kate Redington, Associate Director of Supply Chain CDP, made this point strongly as she opened the session, Solutions for Reducing Value Chain Emissions at the 2021 European SDG Summit. CDP is a not-for-profit charity that runs a global emissions disclosure system. 

Redington went on to stress that when looking at cutting greenhouse gas emissions (GHGs), companies must look beyond direct emissions. So-called ‘Scope 3’ emissions, those that occur right along their value chain, must also be eliminated. 

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Source: CDP

The impact of Scope 3 emissions cannot be overstated, Reddington explained to delegates. “Recent analysis from CDP has shown that supply chain emissions are 11.4 times higher than operational emissions, which is more than double our own previous estimates. So we know that understanding Scope 3 is extremely important to an organisation to really, really address their own carbon impact.”

Targets built on accurate data

There is not yet a consistent methodology for gathering value chain emissions data, but Redington told delegates that companies should urge their suppliers to disclose their own emissions data using science-based targets. 

 

 

 

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Source: CDP

Building targets in this way can begin the process of creating visibility and transparency across the value chain, Redington explained, and form the basis for a strategy to bring suppliers along on their decarbonisation journey.

Creating value with collaboration

At TCS, our approach to sustainability is built on the belief that no single company can go it alone, and that collaboration is central to success. The key principles of this philosophy are laid out in the Sustainable by Design ebook.

By their very nature, supply chains are collaborative so it follows that companies must work in partnership across broad ecosystems to root out and eliminate sources of carbon emissions. 

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Source: TCS Sustainable by Design

The chart above shows how a range of ecosystems interact, ensuring sustainability and circularity principles become embedded across value chains, processes, operations, products and business models.

Value chain collaboration - a case study

The Solutions for Reducing Value Chain Emissions session at the 2021 European SDG Summit heard how collaboration between two of France’s biggest companies is leading to emissions reductions in a real-world scenario. Power supply giant TotalEnergies has set a target to achieve net zero by 2050.

A major part of its strategy is to deliver renewable energy to its biggest clients, thereby cutting a key part of its Scope 3 emissions - the use of fossil fuels by its customers. “The solution is for an on-site, solar plant,” explains Timur Núñez-Yanowsky, Head of Iberia - Renewables Distributed Generation at TotalEnergies, “with electricity produced directly on the customer site, and sold at a predictable price.”

On the other end of this collaboration is French cosmetics giant L’Oréal. The solar plant installed at its Vichy production facility supplies 33% of the factory’s energy needs from almost 4,000 solar panels built above a car park.

The project is an example of how collaboration between companies can reduce carbon emissions across the value chain. For L’Oréal, the plant delivers a cut in Scope 1 emissions. At the same time, Scope 3 emissions are reduced for TotalEnergies.

The true measure sustainability

The themes discussed in this session were perhaps best summed by Stella Di Carlo, Head of Innovability, Global Procurement at Italian energy company, Enel.

Stressing the importance of measuring and reducing emissions across the supply chain she told delegates:

“Sustainability is value. The ability to measure and certify impact is recognised as a value for the company and the entire supply chain.”