Why am I getting asked about my CSR plans?
As many businesses are focusing on their objectives and plans for being carbon neutral and ultimately Net Zero, they are also asking their supply chain about their carbon footprint. With the suppliers carbon footprint is going to be their businesses supply chain. The reason behind the ‘ask’ is that in Scope 3 your businesses needs to take into account the emissions from your suppliers, their products and services. If they (the suppliers) are not being responsible then it would fall on your business and that is going to be a headache that you don’t want. Scope 3 emissions tend to be the largest part of your total emissions. On average Scope 3 emissions make up 65%-70% of an organisations carbon footprint. If a business can address this issue then it drastically impacts their total carbon footprint. If you think about the bill to offset all the scoped emissions carbon that is one big bill. Although the Carbon Offsetting market is opening up with opens, the requirements to pay for all the scopes could still be a big dent in your companies P&L.
The Buying Business
When you are in the situation of being the buyer (buying business) and you are looking at your Scoped emissions report for your organisation as a whole. There are emissions that they will have direct control over and a key understanding (you can get this from one of CNG’s Carbon Baseline Assessments) of your business operations emissions. After this it is working through the Scope 3 emissions. A large part of that is going to be in the purchased goods and services section. For this to be met effectively you will need to be issuing a marketing statement to your suppliers to let them know of your own Carbon plans, your own journey, what you as a business are doing and how the supply chain fits into this. Once you have articulated your message to the suppliers you can see if they will share their own carbon assessment plus an understanding of the carbon attached to the products and services that they supply you with. The idea is here that you can then work with the suppliers who are taking the carbon journey seriously, who have plans for their own and are driving in the same direction as you. This can be a great chance to bring in new suppliers who share the same ethics as you, who are working in the same way as you, as in Net Zero goals and even work on the same Carbon offsetting projects. The cheaper suppliers who may be more cost effective but don’t have the right ethical practices or carbon journey can be highlighted and removed. They may be cheaper as a supplier but when you consider the carbon cost and the cost to offset their emissions in your scope 3, it turns into an easy business decision.
The Supplier
The supplier in this situation may be seen as the part of the problem or part of the solution. This will clearly depend on their own business stance on their Carbon Journey. Regardless of whether you are supplier or buyer, in the modern working world, you need to know your own operational business emissions. The longer project will always take time. This way when a buyer does send you the information they need for their CSR work then you have it to hand.
When we work with the suppliers and their main concern is the cost of our service and how it might impact either their bottom line or the cost of goods sold. They might find that they in turn have to find alternative suppliers who are more expensive and that puts up their cost, making them less competitive in the market place. There is now more demand than ever for suppliers and businesses to be focused on their ethics and carbon neutral status. Spending money on being carbon neutral or offsetting your carbon may open more doors than close them.
Next Steps
For help on your net zero journey or advice on how to offset your carbon correctly, please engage with our team and we can guide you on your journey.