Beyond Offsetting: Emitwise CEO Challenges Businesses to Take Action on Supply Chain Emissions
Mauro Cozzi, Co-founder and CEO of Emitwise, provides insights on the role of supply chains in corporate net zero journeys, the importance of engaging with key suppliers and the need to address supply chain emissions.
How can tackling supply chains play an instrumental role in corporate net zero journeys?
To achieve corporate net zero targets, it is crucial to tackle operational and supply chain emissions, as recommended by the Science Based Targets initiative (SBTi). Companies need to address both upstream and downstream emissions, and while spend data from procurement teams can provide initial accounting for scope 3 emissions, detailed information is required to help suppliers reduce their emissions. This necessitates supplier engagement.
We help businesses in understanding, tracking, and reducing their carbon footprint, including engaging their entire supply chain through our solution Procurewise. Although addressing scope 3 emissions is not currently mandatory, businesses should prioritise this category due to its significant contribution – often 11 times or more – to their overall carbon footprints.
Moreover, disclosing scope 3 emissions is expected to become mandatory in the future under the proposed International Sustainability Standards Board (ISSB) framework.
What are the financial and reputational risks associated with failing to engage with key suppliers?
Companies that lag in environmental commitments now face severe reputational damage across various stakeholders. With over half of consumers influenced by a brand’s sustainable practices, there is growing pressure on businesses to enhance their green credentials – and this includes engaging with supply chains. Furthermore, a significant number of large enterprises are requesting this level of information from their suppliers already, therefore it is a competitive advantage to join these leaders in doing so, or getting ahead of their requests to remain a competitive tender option.
Moreover, failing to adhere to guidelines set by regulations and frameworks can lead to sanctions. As stricter measures aligned with the climate crisis urgency loom, it is in businesses’ interest to proactively stay ahead.
Supply chain emissions typically account for more than 70% of a company’s carbon footprint. What are the best ways to offset this?
Carbon offsets have been positioned as low-hanging fruit for businesses to reach net zero, but the reality is a different picture. Businesses serious about achieving net zero status must invest in transforming emission-intensive activities and implementing structural changes, particularly in supply chains. While offsetting can be a useful tool, it cannot be relied upon as the primary lever for carbon reduction.
Not enough companies have set a net zero target according to research. How would you encourage those to begin the process?
Sustainability has become a fundamental aspect of corporate business models, transitioning from a mere ”nice to have” to the norm. To embark on meaningful changes, businesses must first establish an emissions baseline. Businesses must understand their baseline performance across all three scopes – direct emissions in scope 1, indirect emissions from purchased energy in scope 2, and all other indirect emissions across the value chain in scope 3.
The best way to accomplish this is for companies to take carbon data as seriously as they do financial information, as granularity helps to identify which areas need to be addressed and in what priority order.
How can a clearer definition of a ‘Net Zero Business’ in the UK help businesses?
Accessibility should be improved for businesses of all sizes. While information is available, there is still a need for education, especially among corporates lacking an understanding of how to kickstart their sustainability journey. Research in the last 18 months shows that approximately 2.5 million business owners do not know what is meant by ‘net zero’, highlighting the importance of simplifying processes and terminology where possible.
Where do you want to take Emitwise next?
Recognising the impact of cutting supply chain emissions for businesses, we launched Procurewise in June 2023. This platform helps enterprise companies with complex value chains efficiently understand, measure and act on their scope 3 emissions.
Looking ahead, one of our fundamental goals is to improve accessibility and streamline carbon management for businesses. We aim to advocate for mandatory scope 3 reporting while increasing awareness of its significance. Collaborating with stakeholders will be essential in facilitating the necessary actions to address climate change.