Getting Past Square One with Climate Action in Supply Chains

by | May 23, 2022 | Stories

Four years have passed since the IPCC warned that global emissions must peak and significantly decline before 2030 to limit the transition challenges associated with climate change. Two years ago, the UN called for a Decade of Action to deliver on Sustainable Development Goals before 2030. 

The deadline for answering these calls is just eight years away, and organizations are in the spotlight to rapidly reduce the greenhouse gas (GHG) emissions from their operations and supply chains. Despite the dramatic rise in commitments to address supply chain emissions since 2020, the UN has said that climate action is not advancing at the speed or scale required. CDP analysis reveals that it takes time to comprehensively assess and address supply chain emissions. Suppliers may require a year or more to create mechanisms required to collect data, and it often takes years from initial engagement to set targets and act. To mobilize supply chains to decarbonize before 2030, direct action to engage suppliers is needed now.

Over the last two years Jacobs has taken a deeper dive into the emissions of its own suppliers and those of our clients. Our focus has been on identifying significant emissions sources, acquiring quality data, and supporting data-based supply chain decisions. We recognize the considerable challenges associated with developing complete and accurate supply chain data sets and engaging large numbers of suppliers. Collaboration, information sharing and relationship building – like the opportunities provided at the annual Climate Leadership Conference (CLC) – are critical to cascading action through the value chain.

Jacobs will host a workshop at the upcoming CLC to share challenges, lessons learned and solutions in understanding and mobilizing supply chains to generate credible GHG data and take action. Jacobs and its partners will build on the strategies outlined below for a discussion of real-world lessons learned in implementing supply chain solutions. 

Starting at Square One: Identify Significant Supply Chain Emissions Sources

Managing Scope 3 typically begins with high-level characterization of an organization’s supply chain emissions to identify significant sources and key suppliers for focusing early efforts. The Scope 3 Evaluator tool from GHG Protocol and Quantis is a free, public screening application that provides a snapshot of upstream and downstream emissions based on an organization’s procurement spend and industry average data from economic input-output life cycle analysis studies. Other platforms like US Environmentally-Extended Input-Output (USEEIO) models can also provide sector-based emissions estimates for the United States. 

Screening tools provide a simple Scope 3 estimation to inform action. They support the categorization and prioritization of suppliers that should be targeted with direct engagement to collect primary data and understand actual emissions. Organizations prioritize suppliers according to their potential impact, strategic importance, or where the strongest relationships exist. 

Moving Beyond the Basics: Acquire and Analyze Actual Supply Chain Data

After priorities are set, data acquisition presents the first challenge in supply chain engagement. Supplier-specific data is obtained via direct requests to each supplier, or indirectly through programs and platforms like CDP Supply Chain, EcoVadis and Bloomberg. To collect and analyze our own supplier data, Jacobs joined CDP’s Supply Chain program. We chose this program because we recognized that asking suppliers to disclose to CDP reduces “survey fatigue,” connects them to resources, and enables our own benchmarking of supplier performance. 

Once collected, supplier-specific data must be managed effectively to support decisions and track progress over time. After detailed evaluation and pilot testing, Jacobs found Spherics’ tools to be a good fit for our diverse, international supply chain. Spherics’ key advantages are its ability to match procurement data to sector averages, activities, geography or supplier-provided data, and to automate annual data collection and analysis. 

Affecting Change: Supply Chain Engagement Strategies

Once data is collected and analyzed, reducing the footprint from some supply sectors is easier than others. Where multiple suppliers exist with similar cost and quality, expectations can be integrated into supplier Codes of Conduct and purchasing decisions. Where there are limited suppliers, more work is required to assist those companies in targeting and implementing feasible GHG reduction strategies. 

CDP data shows that engaging suppliers does drive change. Jacobs is doing its part by engaging and working to incentivize our suppliers. Learn more about our latest progress and targets in our Climate Action Plan.