Coca-Cola and Nestle among business giants joining supply chain climate engagement drive
Nine major corporates have joined a partnership enabling large businesses to support suppliers to measure and reduce emissions, spearheaded by Mars, PepsiCo and McCormick & Company.
The Supplier Leadership on Climate Transition consortium was created last April by the three FMCG giants. Under the initiative, large businesses pay for their suppliers to attend a series of educational seminars on how to measure their greenhouse gas emissions, develop and implement plans to reduce them in line with science-based pathways, and report on progress. Guidehouse provides the seminars.
Now, on the first anniversary of the initiative, nine additional businesses have signed up. New joiners from the food and beverage sector are General Mills, The Coca-Cola Company, Keurig Dr Pepper, Mondelez International and Nestle. Also signing up are Atlantic Packaging, The Estee Lauder Companies and two major restaurant firms – Yum! Brands and Restaurant Brands International. Yum! Brands owns the likes of Pizza Hut, KFC and Taco Bell, while Restaurant Brands International is the parent company of chains including Burger King and Tim Hortons.
Collectively, the 12 participating businesses have signed up 1,200 representatives from 400 of their supplier firms for educational seminars. Following on from the seminars, participants are able to access mentoring services. The next round of seminars is due to begin in September.
CDP estimates that the average supply chain network of a large multinational business generates 11.4 times the amount of emissions annually than its operations. This makes supply chain engagement a crucial part of developing and delivering credible corporate net-zero targets. With 75% of global annual revenues generated by listed firms now being generated by firms with net-zero targets, supply chain engagement is becoming a major focus for many.
The Science-Based Targets initiative (SBTi) notably requires businesses whose Scope 3 (indirect) emissions account for 40% of their total annual footprint to set targets addressing at least two-thirds of Scope 3 emissions, if they wish to gain 1.5C verification. 1.5C verification will soon become the SBTi’s minimum target-setting requirement. Mars, Guidehouse and the other consortium members are urging other corporates with verified science-based targets to collaborate with them.
“Effectively delivering against net-zero will require a deep transformation of global supply chains, which will only be possible if companies embed climate action deep into the core of their procurement strategy,” said Mars’s chief procurement and sustainability officer Barry Parkin.
“With more than three-quarters of our emissions coming from the materials that we purchase at Mars, we recognise that supporting our suppliers on a low-carbon transition will be critical in mitigating our impact on the planet. Pre-competitive collaboration between global businesses and suppliers, such as through the Supplier Leadership on Climate Transition Supplier LoCT, will be vital in driving the scale and reach needed to overhaul global supply chains.”
Research published earlier this year by CDP revealed that more than half of large corporates are yet to engage with suppliers on reducing emissions and improving climate resilience. Less than 3% of the suppliers surveyed by CDP had set emissions targets approved by the SBTi. CDP has previously warned that, unless businesses do more to assess and prevent climate risks across their supply chain, they could face up to $120bn in additional costs by 2025.