New ‘Supplier Cascade’ launched, empowering businesses to tackle supply chain emissions

The new ‘Supplier Cascade’ initiative provides businesses with simple guidance on engaging with their Tier One suppliers on emissions.

Businesses participating will be required to ask their Tier One suppliers to set a credible, science-based target to reach net-zero by mid-century. Suppliers should report publicly, and to their clients, their progress in reducing emissions.

Once these suppliers have made progress, they will be asked to make the same requests of their suppliers. In this way, climate requirements ‘cascade’ down the tiers of supply chains.

Aside from We Mean Business, the Supplier Cascade is also supported by CDP, the Science-Based Targets Initiative (SBTi), BSR, Ceres and the Environmental Defence Fund.

CDP estimates that the average business will see at least 70% of its absolute carbon footprint occurring indirectly. This means that any credible corporate climate plan should holistically include Scope 3 emissions.

Of the thousands of businesses disclosing climate-related information to CDP, only four in ten report engaging their suppliers on climate-related topics. Less than half a percent currently require their suppliers to set their own science-based climate targets.

The We Mean Business Coalition’s chief executive Maria Mendiluce said the new Supplier Cascade “does not require the visibility of the entire supply chain, it does not require deep technical knowledge so is more straightforward for buyers and procurement teams to implement, and it provides flexibility to business in how they want to engage and incentivize their suppliers”.

The Cascade is global and pan-industry.

Showcasing possibilities

In the first instance, the Coalition and its partners for the scheme are encouraging larger firms to volunteer to be early movers. Among the uptakers so far is pharmaceutical giant AstraZeneca.

The Coalition’s managing director for net-zero, Jenny Ahlen, told edie that SMEs in particular are looking for examples to “prove that [Scope 3] management is feasible”, providing valuable frameworks that they may not be able to produce in-house themselves.

The Coalition is notably a co-founder of the SME Climate Hub.

Ahlen explained: “This is really the first step in getting companies comfortable with doing supplier engagement. We know there are some companies out there doing great work already, some for a number of years. What we want to do is shine a spotlight on those successes and those companies.

“We know there is a lot of activity, but it’s all taking different forms and shapes. We want to collect and analyse the data so we can understand what works well. From there, we can alter the terms of the guidance.”

She added that a focus on action, rather than on complex accounting, should make the idea of addressing Scope 3 emissions more accessible to a greater number of firms.

“I think Scope 3 has been, and probably will continue to be, a pain point for many companies trying to tackle their climate impact,” said Ahlen.

“A lot of effort to date has been spent on the accounting side of things, and part of what we hope to do with this new initiative is shift companies to having a bias more towards action. Even if they can’t quite perfect their Scope 3 accounting, they can engage their tier one suppliers immediately.”

There will be data improvements, though, as businesses increasingly collect primary data and shift away from relying on proxy calculatons. Ahlen said that her team hopes that the Cascade can unlock a wealth of data that can be shared in the longer-term.

For suppliers, the Cascade should, in time, prevent the burden coming from recieving different climate-related asks from different clients. It provides a unified set of requests for businesses to make of their suppliers.