The Supplier Leadership on Climate Transition consortium was created last April by the three FMCG giants. Under this initiative, large companies 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 accordance scientific pathways and to report on progress. Guidehouse organizes the seminars.
Today, on the first anniversary of the initiative, nine additional companies have signed up. Newcomers to the food and beverage industry include General Mills, The Coca-Cola Company, Keurig Dr Pepper, Mondelez International and Nestlé. Atlantic Packaging, The Estee Lauder Companies and two major catering companies – Yum! Trademarks and International Restaurant Trademarks. Yum! Brands owns Pizza Hut, KFC and Taco Bell, among others, while Restaurant Brands International is the parent company of chains such as Burger King and Tim Hortons.
Collectively, the 12 participating companies enrolled 1,200 representatives from 400 of their suppliers in training seminars. Following the seminars, participants can access mentoring services. The next series of seminars should start in September.
CDP estimates that the average supply chain network of a large multinational company generates 11.4 times more emissions per year than its operations. This makes supply chain engagement a crucial part of developing and achieving credible net zero goals for businesses. With 75% of global annual revenue generated by publicly traded companies now being generated by companies with net zero goals, supply chain engagement is becoming a top priority for many.
The Science-Based Targets initiative (SBTi) notably asks companies whose Scope 3 (indirect) emissions represent 40% of their total annual footprint to set targets covering at least two-thirds of Scope 3 emissions, if they wish obtain a verification of 1.5C. Verification 1.5C will soon become the minimum SBTi goal setting requirement. Mars, Guidehouse and the other members of the consortium urge other companies with verified scientific goals to collaborate with them.
“Being effective against net zero will require a profound transformation of global supply chains, which will only be possible if companies deeply embed climate action at the heart of their sourcing strategy,” said Barry Parkin, Mars Procurement and Sustainability Director.
“With more than three-quarters of our emissions coming from the materials we source from Mars, we recognize that supporting our suppliers in a low-carbon transition will be key to mitigating our impact on the planet. Pre-competitive collaboration between global companies and suppliers, such as through the Supplier Leadership on Climate Transition Supplier LoCT, will be essential in providing the scale and scope needed to reshape global supply chains.
A study released earlier this year by CDP found that more than half of large companies have yet to engage with their suppliers to reduce emissions and improve climate resilience. Less than 3% of suppliers surveyed by CDP had set SBTi-approved emissions targets. CDP has previously warned that unless companies do more to assess and prevent climate risks in their supply chain, they could face additional costs of up to $120 billion by 2025.
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