SUPPLIER
ACTION
GUIDE
How to halve emissions
in your supply chain
by working with your suppliers
Version 1.1
TABLE OF CONTENTS
Introduction...................................................................................................................... 3
About this guide.............................................................................................................. 4
Foundation......................................................................................................................... 6
Management commitment............................................................................................ 6
Supplier engagement targets........................................................................................ 6
Supply chain emissions mapping................................................................................. 8
Procurement...................................................................................................................... 9
Setting clear expectations.............................................................................................. 9
Process integration............................................................................................................ 12
Internal alignment............................................................................................................. 14
upplier engagement....................................................................................................
S 15
Supplier dialogue .............................................................................................................. 15
Supplier support................................................................................................................ 16
Supplier recognition......................................................................................................... 17
eporting...........................................................................................................................
R 18
Suppliers’ progress reporting........................................................................................ 18
Management of supplier performance data............................................................ 19
Company progress reporting......................................................................................... 20
ollaboration and innovation................................................................................... 21
C
Accelerating action through collaboration............................................................... 21
eferences.......................................................................................................................... 22
R
Authors and contributors............................................................................................ 23
2
INTRODUCTION
To limit global warming to 1.5°C, chain emissions is therefore one of
we must cut global greenhouse gas the most effective strategies to reduce
emissions in half by 2030 and achieve total emissions. By working with your
net zero emissions no later than 2050. suppliers we can accelerate change to
At the same time, we need to remove the exponential rate that we need.
some of the carbon dioxide already
in the atmosphere (IPCC, 2021). This guide offers practical advice
Companies that act swiftly can gain a and tools to help ensure your key
significant competitive edge and boost strategic suppliers help you achieve
their resilience, helping them comply your net zero goal, in line with the
with upcoming climate regulations. latest climate science from the UN’s
Intergovernmental Panel on Climate
A significant part of many companies Change (IPCC). It specifically supports
greenhouse gas emissions — often the second pillar of the 1.5°C Business
more than 90% — come from their Playbook - reducing your value chain
supply chains (when considering total emissions.
climate impact)1. Reducing supply
3
ABOUT THIS
GUIDE
This guide offers a framework for any engagement on climate and aligning
company looking to work with suppliers buyer requirements. It also provides a set
to set and reach climate goals in line of best practices and frameworks.
with limiting global temperature rise
to 1.5°C. Suppliers can then cascade This guide is a spin-off from the Supplier
this approach across their own supply Engagement Guide, developed by the
chains. This guide aligns with the Exponential Roadmap Initiative, BSR,
1.5°C Business Playbook, suggesting Telia and Ericsson.
a simplified structure for supplier
Halving by 2030: According to the Carbon Law (Rockström, 2017), we need
to halve emissions every decade until 2050 to limit global temperature rise
to a maximum of 1.5°C. The first halving must be achieved by 2030. The
UN’s Intergovernmental Panel on Climate Change Special Report on Global
Warming of 1.5°C (IPCC, 2018) equally highlighted that global emissions
have to roughly halve by 2030 from 2010 levels and reach net zero by 2050
to achieve 1.5°C pathways.
Net Zero: A state reached by an organisation that has reduced its value
chain emissions (Scope 1, Scope 2 and Scope 3 emissions) following a
1.5°C-aligned pathway, with any remaining residual greenhouse gas
emissions being fully neutralised by permanent or like-for-like removals
exclusively claimed by that organisation2. The term ”residual” refers to
emissions that remain technically unfeasible to be eliminated. Such residual
emissions should not exceed 10% of baseline emissions3.
4
FREQUENTLY ASKED QUESTIONS different challenges and opportunities,
depending on their sector, geographical
How is this guide connected to our coverage, and other factors. Some
company’s overall climate goals? might need extra support or innovative
This guide is based on the assumption solutions to achieve their 1.5°C target,
that your company already has a while others might be ready to act
climate goal in line with limiting faster and should be incentivised and
global temperature rise to 1.5°C. supported to do so.
Setting supplier targets, as this guide
suggests, is just one of many ways to Which suppliers should companies
reduce emissions while meeting your work with to set climate targets and
supply chain needs. Other strategies initiate action?
might include improving product or The IPCC’s WG1 Sixth Assessment (IPCC,
service design, encouraging the use of 2021) clearly warns that all companies
renewable energy in your supply chain need to align themselves with a goal of
or modifying business models. However, limiting climate change to 1.5°C, and to
supplier targets are a crucial step therefore halve their greenhouse gas
towards inspiring action among your emissions by 2030. This guide advises
suppliers. companies to encourage all of their
suppliers to align with these goals,
Can all suppliers and supply chains and to share resources among them
use the suggested activities? wherever possible. However, a company
Every supply chain is unique, so may also choose to focus initially on
companies should choose the actions working with a small group of suppliers
from this guide that best suit their that represent the majority of its supply
situation. Individual suppliers will face chain emissions.
HOW TO USE THIS GUIDE
The primary audiences for this guide are company executives and
employees who either work with suppliers or on reducing carbon
emissions. This could include teams working on procurement, supply
chain engagement, or sustainability. Depending on a company’s internal
priorities and the complexity of their supply chains, the focus of this work
will vary.
While this guide offers a shared framework, each company should adjust
it to suit their unique situation. However, they must remain focused on
the target of halving greenhouse gas emissions by 2030, which is a key
step towards achieving the global goal of net zero emissions by 2050.
5
FOUNDATION
MANAGEMENT COMMITMENT
Achieving the goal of halving supply chain emissions before 2030
requires clear management support from the start, as well as defined
responsibilities. Several departments within an organization often
need to be involved.
ACTIVITIES
■ Explore where commitments need to be secured - on what levels
and in which departments.
■ Facilitate alignment on climate strategy with relevant depart-
ments, such as sourcing, indirect procurement, R&D, and finance.
■ Assign clear responsibilities, identify potential actions, and clarify
implications for each department or function.
SUPPLIER ENGAGEMENT TARGETS
Achieving the goal of halving supply chain emissions before 2030
requires clear management support from the start, as well as defined
responsibilities. Several departments within an organization often
need to be involved.
ACTIVITIES
■ Set and announce a goal to halve the greenhouse gas emissions
from your supply chain by 2030.
■ Set a target date for suppliers to also make commitments to halve
their emissions by 2030.
■ Determine which suppliers to engage with directly for maximum
impact.
■ If you work with many small suppliers, direct them to public tools
and resources like the SME Climate Hub.
■ Disclose your supplier targets publicly and report on progress at
least once a year.
■ Set short-term targets to easily track progress.
6
EXAMPLE TARGET METRICS
■ X% or a specific number of suppliers have committed to and are
taking action to halve their greenhouse gas emissions by 2030.
■ Suppliers accounting for X% of the company’s procurement
spending have committed to and are taking action to halve their
greenhouse gas emissions by 2030.
■ Suppliers contributing to X% of the company’s supply chain
emissions have committed to and are taking action to halve their
greenhouse gas emissions by 2030.
■ Greenhouse gas emissions of suppliers will be reduced by X% by a
given target year.
■ X % of strategic suppliers have joined the UN Climate Change
High-Level Champions’ Race to Zero campaign and will report their
progress to the Science Based Targets initiative (SBTi), SME Climate
Hub, Exponential Roadmap Initiative or another public platform
that contributes to the UNFCCC Global Climate Action Portal.
! Reducing supplier emissions by a specific percentage is a
great target. However, obtaining high-quality emissions
estimates for tracking progress may take some time. A
simpler target, such as counting suppliers that have made
a commitment and are taking action, may allow for swifter
progress.
! Trying to engage with all suppliers might be challenging. It
is essential to prioritise where you can have the most impact.
However, it is also important to communicate your climate
ambition to all your suppliers, including SMEs, to contribute
to the broader goal of net zero in society.
! When implementing corporate decarbonization strategies,
make sure to align your supplier requirements with existing
industry standards and platforms, like the GHG Protocol and
the CDP.
7
SUPPLY CHAIN EMISSIONS MAPPING
Mapping your company’s supply chain greenhouse gas emissions,
identifying the main contributors, and pinpointing potential reduction
areas will show where efforts to engage suppliers are likely to have the
greatest impact.
ACTIVITIES
■ Familiarise yourself with the stages of your supply chain, from the
initial sourcing of raw materials to the delivery of products and
services to you.
■ Map your company’s supply chain greenhouse gas emissions
to the best of your ability. If possible, use primary data from
your main suppliers and lifecycle assessments of products and
materials.
■ Carry out a greenhouse gas “hotspot” analysis to identify the
largest emission sources.
Choose which suppliers to engage with first, using criteria such as:
SPEND WITH SUPPLIER EMISSION FACTOR OF PRODUCT/SERVICE
MATURITY OF SUPPLIERS CLIMATE WORK STRATEGIC PARTNERSHIP WITH SUPPLIER
RELATIONSHIP WITH SUPPLIER GEOGRAPHICAL COVERAGE OF SUPPLIER
! Obtaining high quality emissions data for supply chains can be
challenging. Initial estimates are often enough to get started
and help with prioritising. The accuracy of these estimates will
improve as the work continues.
8
PROCUREMENT
SETTING CLEAR EXPECTATIONS
Communicating to your suppliers that you expect them to halve their emissions by
2030 will motivate them to set targets and take necessary action. This message will
have more weight, and be easier to act upon, if it comes from your top management
and is echoed by the procurement and sales teams.
ACTIVITIES
■ Prepare a clear, easy-to-understand message about your expectations for both
your team and your suppliers.
■ Include support, information, and resources in your message to your suppliers.
See the ‘Support’ section in this guide for more information.
■ Acting in collaboration with buyers in other companies can send a unified
message to suppliers, increasing the likelihood of action.
YOUR COMMUNICATION CAN TAKE MANY FORMS, FOR EXAMPLE
■ An email sent from your company’s leadership or procurement team.
■ A press release or mention on your company’s webpage.
■ Including your expectations in your Supplier Code of Conduct.
■ Joining relevant initiatives such as 1.5° Supply Chain Leaders or Sustainable
Freight Buyers Alliance.
■ Incorporating your expectations in supplier performance scorecards.
9
Here is an example letter that is aligned with science and best practices:
Dear Supplier,
Conducting business responsibly is fundamental to
<insert company name>’s strategy and culture. If the
planet continues to heat, the impacts on society will be
catastrophic. Climate action on a global scale is needed
now.
As a member of the Race to Zero, led by the UN Climate
Change High-Level Champions, <insert company name>
is committing to keeping global warming lower than
1.5°C. To achieve this 1.5°C ambition, global greenhouse
gas emissions must halve by 2030, and reach net zero
by 2050, all while protecting nature. We need an urgent,
collaborative and coordinated approach to generate the
momentum required for significant global climate action,
and we expect our suppliers to join us on this crucial
journey.
We ask that you, as our supplier:
■ Set a public target to halve your absolute emissions by
2030 and start taking action to reach that target.
■ Disclose your progress publically every year.
■ Share this letter and request with your suppliers,
and communicate your climate commitment to your
customers.
<optional: insert your company’s climate ambitions or targets
here, and mention benefits for your suppliers if they align,
such as a higher score during supplier evaluation and gaining
a competitive edge>
We’d like to express our gratitude to suppliers who are
already committed to this cause, and look forward to
mutual progress. This is a race we can only win together!
1 (2)
10
For further information on how to align with our 1.5°C
ambition, please see:
■ 1.5°C Business Playbook – a free guide to align your
organisation’s strategy and action with a sustainable
future.
■ SBTi (Science Based Targets initiative) – useful for setting
1.5°C aligned targets and calculating those targets.
Often used by larger companies.
■ SME Climate Hub – a one-stop-shop for small- and
medium-sized companies looking to commit to and
report on climate action, with free tools and guides for
the different stages of the process.
■ Supplier Action Guide – provides support on how to
implement a 1.5°C ambition into your own supply chain.
We look forward to having you join us on the vital
transformations we need to keep global warming below
1.5°C. Please get back to us by <insert date> with your plan
on setting a 1.5°C aligned target, or a link to a public target
already in place. Thank you for your commitment and
valuable support.
Best regards,
<company representative’s name and title>
2 (2)
11
PROCESS INTEGRATION
Integrating your expectations into procurement documents and
processes will provide clear instructions for both your suppliers and
your procurement team.
ACTIVITIES
■ Include a requirement in key procurement documents for supp-
liers to halve their emissions by 2030 and report on their green-
house gas emissions in line with recognised standards (like the
GHG Protocol). These documents may include:
» New supplier contracts
» Supplier Code of Conduct
» Requests for Information (RFI) or Proposals (RFP)
» Supplier self-assessments
» Performance cards
■ Integrate climate considerations into the processes and
documents in your procurement portal.
■ Include climate-related criteria when evaluating new suppliers
and renewing contracts with current ones.
■ Work with your procurement team to weave your climate target
into ongoing conversations with suppliers.
! Since both contracts and suppliers’ awareness and readiness to
deal with climate issues vary, integrating these processes might
require some initial flexibility.
!
Consider the opportunities and costs of working with your cur-
rent suppliers to improve their practices within current contracts
versus signing new contracts or looking for new suppliers. You
might need different strategies in different scenarios.
12
SAMPLE CODE OF CONDUCT ON CLIMATE:
Disclaimer: This is a general example that only reflects climate
requirements for suppliers and doesn’t cover all environmental
expectations. Depending on your industry, you may need to add more
specific climate-related requirements.
THE SUPPLIER IS REQUIRED TO ADDRESS ITS CLIMATE
IMPACT IN A STRUCTURED MANNER, FOLLOWING THESE
GUIDELINES:
■ The supplier shall publicly commit to reduce its greenhouse
gas emissions to align with the 1.5°C scenario presented by the
IPCC’s special report on global warming of 1.5°C (IPCC, 2018). This
involves halving greenhouse gas emissions in the supplier’s entire
value chain every ten years.
■ Within two years, the supplier shall set verified, science-based
or similar targets for relevant Scope 1, 2 and 3 emissions, as
described in the GHG Protocol Corporate Standard.
■ Further requirements on energy consumption and climate
mitigation may be applicable.
13
INTERNAL ALIGNMENT
The procurement team plays a critical role in implementing your
supplier strategy, and therefore in reaching your goal of halving
supply chain greenhouse gas emissions by 2030. Because of this, your
procurement team may need training to understand your company’s
strategy and their role in it. Offering suitable internal incentives tied to
achieving climate goals can further strengthen internal support.
ACTIVITIES
■ Identify the key employees who are central to achieving your
supplier decarbonisation target.
■ Educate selected procurement team members on your company’s
climate goals, the importance of halving supply chain emissions
before 2030, and how procurement can help meet those goals.
■ Consider relevant incentives linked to climate performance for
procurement and sustainability teams. For example, you could
integrate relevant climate KPIs into employee reviews and
performance evaluations.
! Think about incorporating your supplier climate targets and
engagement efforts into your internal communications.
These can increase awareness among a wider group of
your employees, encouraging involvement and building
momentum.
14
SUPPLIER
ENGAGEMENT
SUPPLIER DIALOGUE
Having an open conversation with suppliers about climate helps to
make your expectations clear and highlights the actions needed to cut
emissions. It also builds trust between your organisations, and helps to
identify collaboration opportunities and support needs.
ACTIVITIES
■ Include climate performance in ongoing business conversations
and regular reviews between procurement (or other relevant
departments) and supplier representatives.
■ Ensure suppliers understand the expectation to cut emissions by
50% before 2030.
■ Ask suppliers about their existing emission reduction targets and
assess whether they align with your climate goals. If not, ask for
them to be revised.
■ Review suppliers’ transition plans to ensure they’re relevant to
and in line with their targets for emissions reductions.
■ Understand any concerns suppliers may have, such as those
around setting appropriate targets and on how to decrease their
emissions.
■ Regularly discuss climate performance with suppliers to track
progress, provide examples of peer performance, and identify
mutual needs and opportunities.
!
An open conversation with your key suppliers about
your climate goals and the barriers and obstacles to
achieving them, as well as how best to address those
challenges together, may lead to better progress.
15
SUPPLIER SUPPORT
Helping suppliers with information, tools, and examples can accelerate
their goal-setting process and help them to take action sooner.
ACTIVITIES
■ Point suppliers towards publicly-available tools and guides. Below
are some examples of tools that are freely available online.
» 1.5°C Business Playbook: Designed for companies and organisations
of all sizes who want to take concrete action to limit climate change
to 1.5°C.
» GHG Protocol: Offers greenhouse gas accounting standards, guidan-
ce and tools.
» Science Based Targets initiative (SBTi): Provides target-setting metho-
dologies and tools.
» SME Climate Hub: Offers tools and resources specifically designed
for small and medium-sized businesses.
■ Provide ad-hoc support, where practical and realistic, such as:
» Hosting webinars or other gatherings for suppliers.
» Offering one-on-one or group support on specific topics of interest,
such as quantifying emissions, or purchasing renewable energy.
■ Help suppliers explore shared solutions, such as facilitating virtual
PPAs (Power Purchase Agreements).
! Consider sector-specific or geography-specific resources
that could be relevant for supporting your suppliers, like
resources on renewable energy.
! If possible, offer financial support to suppliers, eg
discounted loans, investments in renewable energy,
electrification, or installing charging infrastructure.
16
SUPPLIER RECOGNITION
Well-designed incentive schemes can motivate suppliers that are still
working on their decarbonisation journey, lack motivation, or simply
don’t have the necessary resources to start. Incentives and recognition
can take various forms.
ACTIVITIES
Develop suitable ways to recognise good climate performance among
your suppliers, and embed this recognition in procurement processes.
Examples may include:
■ Publicly acknowledging supplier climate performance, for
example through your website or with peers.
■ Offering preferential conditions, like improved payment terms,
longer contracts tied to climate performance, or considering
larger purchase orders.
■ Making financial contributions to greenhouse gas reduction
initiatives, like switching to renewable energy in a supplier
factory.
■ Collective financing with suppliers, such as for renewable energy
installations.
17
REPORTING
SUPPLIERS’ PROGRESS REPORTING
Annual reporting from suppliers on their greenhouse gas emissions
and progress against targets encourages accountability and allows for
performance tracking. Public reporting by suppliers allows them to
share the same information with all of their customers and with other
stakeholders at the same time, saving time and effort.
ACTIVITIES
■ Ask suppliers to set a goal to halve their emissions before 2030,
and disclose it publicly.
■ Ask suppliers to report their Scope 1, 2 and 3 greenhouse gas
emissions annually, aligning with international standards like the
GHG Protocol.
■ Request that suppliers publicly report their progress towards their
target of halving emissions before 2030.
! Acknowledge the potential difficulties your suppliers
may face with reporting their progress, and offer them
support in reaching shared goals. The Supplier support
section above provides guidance on how to do this.
18
MANAGEMENT OF SUPPLIERS’ PERFORMANCE DATA
Keeping track of your suppliers’ annual disclosures helps you to gauge
their progress and understand how your efforts are helping to achieve
your company’s own climate goals.
ACTIVITIES
■ Define who is responsible for tracking progress annually within
your organisation, and how to do it. Use your suppliers’ public re-
porting to track the existence of a goal to halve emissions before
2030, as well as annual progress towards that goal.
■ Provide a summary of suppliers’ climate performance to procure-
ment teams for their conversations with suppliers.
! Tracking can often be a manual process. It’s useful to
automate these processes and to apply open standards
and tools to avoid future technological lock-in.
Note that suppliers’ reporting will cover their entire
organisational scope, not just emissions directly linked
to your products or services.
19
COMPANY PROGRESS REPORTING
Keeping track of your suppliers’ collective progress helps your
company to monitor its journey towards supply chain emissions
reduction targets, and make course corrections if needed.
Supplier performance data forms a crucial part of your company’s
public climate reporting and demonstrates transparency to your
stakeholders.
ACTIVITIES
■ Publicly disclose your company’s progress on achieving its supply
chain emissions reduction targets.
■ Link the result of your supplier target to the progress towards
your overall supply chain decarbonization goal.
■ Use relevant channels for reporting, such as a sustainability
report, your company’s website, or other platforms.
EXAMPLE PROGRESS REPORT IN ANNUAL REPORT
OUR GOAL
By 2024, we aim to get 200 of our highest-emitting suppliers to set
their own emissions reduction targets, aligned with the objective of
keeping global temperature rise below 1.5°C. The outcome of this goal
will address roughly 80% of our company’s carbon footprint related
to the supply chain. To be accepted, a supplier’s target must be made
public, it must consider relevant emissions from scopes 1, 2 and 3, and
it must be accompanied by public annual reporting on progress to
achieve that target.
2023 RESULTS
By year end, 189 suppliers had set targets that meet the criteria, and
the company is on track to achieve its 2024 supplier climate target.
!
Communication about your company’s climate action should be honest,
truthful, transparent, representative, and based on the latest science.
Companies should not only highlight their success, but also communi-
cate on challenges and barriers, to inspire others and build credibility.
20
COLLABORATION
AND INNOVATION
ACCELERATING ACTION THROUGH COLLABORATION
Working together on identifying new solutions, deepening
knowledge, sharing best practices, and driving solutions at the
systemic or industry level can accelerate action to halve greenhouse
gas emissions by 2030.
Harmonising approaches to decarbonisation across departments,
stakeholders and industries can reduce climate action ‘fatigue’ for both
buyers and suppliers, encourage other buyers to join the movement,
encourage collective progress, and incentivise suppliers to take action
if they receive unified requests from multiple buyers.
Consider the following collaboration strategies for stakeholders
outside your organisation:
■ Collaborate with like-minded buyers to hasten change amongst
common suppliers.
■ Work with partners to implement programs supporting climate
action in your supply chain.
■ Collaborate to support a systemic decarbonisation approach with
a broad range of like-minded stakeholders outside your business
operations, like peers, NGOs, customers, governments, and
academia.
■ Educate your customers about your efforts and ask for their
support.
21
REFERENCES
1. CDP, Transparency to Transformation: A Chain Reaction. Global Supply Chain Report
(2020). https://www.cdp.net/en/research/global-reports/transparency-to-transformation
2. GHG Protocol, Corporate Accounting and Reporting Standard (2004).
https://ghgprotocol.org/corporate-standard
3. IPCC, Special Report: Global Warming of 1.5ºC (2018). https://www.ipcc.ch/sr15/
4. IPCC, Climate Change 2021: The Physical Science Basis (2021).
https://www.ipcc.ch/report/sixth-assessment-report-working-group-i/
5. ISO, IWA 42:2022 Net zero guidelines (2022).
https://www.iso.org/contents/data/standard/08/50/85089.html
6. J. Falk et al., The 1.5°C Business Playbook (2022).
https://exponentialroadmap.org/business-playbook
7. J. Falk et al., Supplier Action Guide (2023).
https://exponentialroadmap.org/supplier-action-guide/
8. Race to Zero, Criteria 3.0 (2022).
https://climatechampions.unfccc.int/system/criteria/
9. J. Rockström, et al, A roadmap for rapid decarbonization. Science (2017).
https://www.stockholmresilience.org/publications/publications/2017-03-27-a-road-
map-for-rapid-decarbonization.html
10. SBTi, The Corporate Net-Zero Standard (2023).
https://sciencebasedtargets.org/net-zero
22
AUTHORS AND CONTRIBUTORS
AUTHORS
Louise Rehbinder, Ericsson (at time of writing)
Sara Gorton, Telia (at time of writing)
Laura Perez Casado, Exponential Roadmap Initiative
Johan Falk, Exponential Roadmap Initiative
REVIEWERS
Gabrielle Ginér, BT
Madeleine Nordqvist, Telia
Stella Constantatos, Unilever
Markus Olofsgård, AFRY
Andreas Ahrens, IKEA
Jérôme Manceau, Icebug
Claire Wigg, Exponential Roadmap Initiative
DESIGN AND LAYOUT EDITORS
Mina Karami, Azote Duncan Geere, Klimat Studio
23
www.exponentialbusiness.org
