Scope 3 emissions are notoriously difficult to curtail, and the average supply chain accounts for 90% of a consumer company’s impact on the environment. The key to tackling these emissions comes down to collaboration with those supply-chain participants and a laser focus on the particular factors each industry is dealing with, experts explained during Fortune’s Global Sustainability Forum last week.
“You have to really partner with those companies to enable them to set science-based targets” says Suzanne DiBianca, cofounder and chief impact officer at Salesforce.
To do that, Salesforce introduced a supplier sustainability exhibit, where their suppliers—upon renewal of their current contract—agree to reduce their carbon emissions.
Susan Lorenz-Fisher, senior vice president of corporate responsibility and sustainability at AmerisourceBergen, said that while incentivizing suppliers often works to reach carbon goals, her company has had more success with a collaborative model.
“The carrot and stick piece is always an effective way, but given the challenges we’ve seen—particularly in health care—it’s really been much more of an engagement collaborative model that still needs to mature,” she said. “But there’s a lot of…momentum through partner organizations that I think will make a positive impact in the short- and long-term.”
Of course, collaboration won’t make the problem of these emissions any easier to combat. Supply chains deal with disruptions from a variety of factors, many of which are out of our control.
“The world is facing significant challenges,” said Pilar Cruz, chief sustainability officer at Cargill, which focuses on food transportation and operates in 70 countries. Those challenges include the pandemic, extreme weather events (such as Hurricane Ian in Florida), political divides, and war.
And the onus of making the supply chain sustainable amid those challenges is on companies. Many believe that while consumers are increasingly invested in net-zero goals from the companies they support, they’re not always in a position to pay more to purchase those products.
“It’s important that the everyday, affordable choice becomes the sustainable choice,” said Kathleen McLaughlin, executive vice president and chief sustainability officer at Walmart.
“Customers, on average, increasingly are aware of environmental and social issues, and they increasingly care. We see that in our data,” she added. “That said, there are some customers who are able to and willing to pay more to contribute to all the transitions we talked about. And then there are many people who don’t want to or can’t. They’re just really concerned with feeding their families and keeping a roof over their heads.”
A challenge companies such as Walmart face is the sheer volume and breadth of the products they offer. Everything from T-shirts to apples, as McLaughlin put it. One way Walmart has approached this is through Project Gigaton, which aims to reduce Scope 3 emissions through partnerships with suppliers.
In order to make products more sustainable, companies need to have the right technology at their disposal to zero in on problem spots within the supply chain. One way to do that is through strategic partnerships.
“We’ve really found that partnering with organizations that are helping to equip the health care supply chain more broadly, to be more resilient, has been a really good area of partnership for us,” Lorenz-Fisher said.
