Vizibl’s Tim Fowler encourages organisations to take the advice of Voltaire, See Saw, Gretzky and the European Parliament to meet their sustainability pledges.
In March 2023, lawmakers in the European Parliament voted 544-18 to approve the adoption of new proposed rules requiring companies to substantiate and verify their environmental claims.
The European Parliament stated that half of existing green claims by companies in the EU were vague or misleading, and 40% were completely unsubstantiated.
The EU Parliament is also set to include the prohibition of green claims such as “carbon neutral” or “climate neutral” that are based solely on carbon offsetting – a tool that has been used to demonstrate corporate action, but provides little more than a temporary fix and essentially “kicking the can down the road.”
The pressure to decarbonise continues to grow at pace, and from all angles – from courts, and legislators, to regulators, governments, and customers.
This signals a call to action; businesses must take urgent action to reduce or remove emissions, even in the absence of perfect “state of play” data.
Senior executives are realising that their ambitious 2025, 2030, and 2050 sustainability targets are looming and need to demonstrate to investors, customers, and other stakeholders how they will be achieved.
Organisations have started to assess their current carbon footprint, creating sustainability teams that are often drowning in methodologies and data sources but have little confidence in their ability to document an accurate baseline for their current carbon footprint.
The reason for the uncertainty is a growing realisation that 80%+ of their carbon footprint sits in their supply chain – and therefore outside of their direct control.
Wide-scale emissions reductions will only be achieved by getting these emissions under active management, and that can only be achieved through high quality supplier engagement.
It is equally crucial that we can pursue, manage, track, and prove this engagement whilst we refine our emissions data in a parallel stream.
This realisation creates an organisational challenge – exactly how do we engage suppliers to start measuring the carbon they generate in providing the goods and services we buy from them?
Many of these suppliers are equally challenged, with few corporate standards, little understanding of decarbonisation, and without the internal skills or processes to answer your requests for carbon emission data.
In the future, perhaps each supplier invoice will document both the price and the carbon ‘bill’. In the absence of a time machine, however, we need to work with what we have.
We are at a tipping point –just seven years away from 2030.
If we don’t start taking action by engaging effectively with suppliers, we won’t make the impact we need to meet our targets – but how can we act if we can’t get an accurate baseline?
Vizibl clients have identified two initiatives that will drive their carbon reduction program:
1. Estimate a ‘rough’ current carbon footprint through primary and supplier submitted data – but recognise that it will evolve and fluctuate.
2. Identify where you can take action to drive the most impact to reduce carbon emissions in your supply chain, and get started.
Let’s take each of these points in order:
"Le mieux est le mortel ennemi du bien"
In 1726, Voltaire wrote ‘the best is the mortal enemy of the good’.
Your organisation has two choices. You can continue to refine your data and tell your stakeholders you’ll get back to them with a plan to achieve your goals. Or, alternatively, you can work in parallel to keep refining the data while building your pipeline of initiatives to reduce your carbon emissions.
Many of our clients realise that their carbon emissions baseline will increase over the next few years as better understanding of greenhouse gas emissions drives new disclosures that expand their recognised carbon footprint.
By accepting this uncertainty, your organisation can move forward to start engaging with suppliers to make a material impact on reducing your carbon emissions.
“I can live with doubt and uncertainty. I think it's much more interesting to live not knowing than to have answers which might be wrong.” – Richard Feynman
In 1973, Cy Coleman and Dorothy Field wrote the musical SeeSaw. While you may not remember the musical, you will probably remember one of the hit songs: ‘It’s not where you start, it’s where you finish.’
Or if you prefer, consider this well known sporting metaphor: the 20th century ‘philosopher’ Wayne Gretzky quoted his father saying, “Skate to where the puck is going, not where it has been.”
While Coleman, Field, and Gretzky’s views on carbon reduction are unknown, they illuminate a truth for us in this area: you need to build a path to the 2030 future, starting now.
Question: What is your organisation's glidepath towards your 2030 targets?
Question: How much of your supply chain emissions are you actively managing?
Question: Where is the pipeline of supplier-led initiatives that will achieve your 2030 carbon emission reduction goal?
In other words, how are you going to get to where the puck is going to be?
We are seeing a tipping point in 2023 where more clients realise that better measurement won’t solve their challenges alone. They understand that they need action, not just measurement.
Vizibl recommends four key steps to get you closer to your emissions goals:
Communicate and educate the leading carbon emitters in your supply chain. Engage internal stakeholders, define organisational responsibilities, and agree mutual goals with these suppliers
Break down these goals into mutual action plans and enable suppliers & other stakeholders to co-develop solutions. Forecast the expected impact of these initiatives and track the actual results against your goals.
Some categories will require more than linear evolution. They will require total transformation through new technologies and new suppliers. Identifying these categories early on maximises the time you have in order to jointly innovate, fail fast and ultimately deliver success.
Embrace reporting and dashboards, build your audit trail, and instate robust governance to prove your reductions.
We established earlier on in this article that the key to taking effective action is high quality supplier engagement.
Supplier engagement can be categorised into a series of activities and tactics designed to strengthen and deepen relationships with incumbent suppliers, with the purpose of achieving mutually beneficial strategic outcomes. We explored this subject in detail in a recently published paper, which can be found here.
As a key supplier engagement tactic, some of our clients are building de-carbonisation clubs with their suppliers and stakeholders to share best practices and success stories that educate, inspire, motivate, and justify these collaborations.
Though it’s currently the most pressing, carbon emissions reduction is just one element of a corporate ESG programme. To achieve your wider ESG goals your organisation will be depending on its ability to engage suppliers across the wider sustainability agenda, to drive mutual benefits.
Where does Vizibl fit in? We are the platform that enables our clients to actively manage their carbon emissions reductions with their suppliers.
Our clients realise they need one source of the truth that shows current state, documents, and targets, that captures progress, coordinates conversations, and reports on the impact of joint initiatives with their suppliers at scale.
Vizibl is the SaaS platform that meets these needs.
To watch Vizibl founder & chairman Mark Perera’s recent CIPS keynote presentation on Supplier Sustainability & Supplier Engagement, click here.
