Shaping the Path Toward Net Zero Through Supplier Engagement
Five mechanisms (codes of conduct, finance, digital platforms, training, co-innovation) drive supplier engagement for net zero, but few reach beyond tier 1.
Summary
The article looks at how 25 global firms try to bring suppliers into their net-zero efforts, given that upstream indirect (Scope 3) emissions can be up to 28 times a company's direct emissions. It identifies five engagement mechanisms: codes of conduct, financial instruments, digital platforms, supplier training and co-innovation. It then asks how far each is applied beyond tier-1 suppliers, and the framing suggests most stop at the first tier and struggle to reach deeper, globally dispersed supply networks.
Editor's opinion
Most of a company's emissions sit with its suppliers, yet the tools firms use to engage them (standards, finance, platforms, training, joint innovation) appear to stop mostly at tier 1. Net-zero targets are only as credible as a company's reach into its deeper supply tiers.
Key concepts
net zero · Scope 3 · supplier engagement · decarbonization