Insights from the Future of Climate Action conference

Climate change is an urgent global concern that has prompted companies to develop comprehensive climate action plans, including strategies to reduce their greenhouse gas (GHG) emissions. While companies can easily measure and control their Scope 1 and 2 emissions, addressing Scope 3 emissions presents unique challenges. These indirect emissions, which encompass the emissions from suppliers and customers, often represent a significant portion of a company’s carbon footprint.

The Innovation Forum’s online climate conference, the Future of Climate Action, brings together a global audience of cross-industry experts to address  practical solutions and steps businesses, especially retailers, can take to tackle Scope 3 emissions. This ranges from how to engage key actors to how to decarbonize supply chains and achieve net zero.

We had the opportunity to hear from companies including Walmart, Colgate-Palmolive, Tetra Pak and Mattel about their journeys to tackle Scope 3 emissions, from understanding these emissions to creating platforms and alliances to measure and reduce them.

Session 1: The Power of Partnerships and Actionable Targets

The conference emphasized the importance of partnerships in achieving Scope 3 emission targets. Companies along the supply chain possess valuable information that can help manage and reduce these emissions. By collaborating and sharing knowledge, data and expertise, businesses can develop more effective strategies. Also, rather than pursuing perfectionism in data collection, leveraging available data to initiate actions and projects is essential. Over time, this approach enhances transparency, traceability and the overall understanding of Scope 3 emissions.

A manufacturing company specializing in roof windows, skylights and related accessories shared its recent strategy of entering into a long-term contract with a key supplier. The company requires a significant amount of aluminum for its manufacturing process and has partnered with an aluminum supplier to ensure a consistent and reliable supply of high-content recycled aluminum. By using recycled aluminum, which generates 95% fewer carbon emissions compared with primary aluminum production, the company aims to decarbonize its value chain and reduce its Scope 3 carbon emissions. This long-term commitment not only offers the suppliers certainty but also incentivizes them to invest in low-carbon solutions. Also, the contract mitigates the risks associated with supply chain disruptions by establishing clear expectations regarding material quantities and sources, thus enhancing business opportunities while reducing potential crises.

Session 2: Embedding Sustainability Throughout the Business

To achieve long-term climate goals, sustainability must be integrated into the core of a company’s operations, such as R&D. Top management plays a vital role in driving alignment and clear strategies across the organization. Creating multiple sustainability indicators that touch various areas of the company, such as finance for ESG reporting, enables effective monitoring and progress tracking. It is also important to prioritize meaningful discussions rather than getting caught up in minor details. 

Session 3: Sticking to Science and Linking Progress to Business Growth

Aligning with recognized programs and methodologies provides clarity, transparency and traceability of data and information. By basing strategies on scientific foundations and understanding the specific context of each company, valuable and effective approaches can be developed. As environmental impact or sustainability performance becomes a currency for business, companies can gain a competitive edge by meeting consumers’ demand for sustainable practices. It is crucial to embrace an iterative process, remaining open to readjustment and continuously making informed decisions, especially because this is just the beginning of the journey toward net zero.

Looking Forward

In summary, the journey to reduce Scope 3 emissions is still in its early stages for most industries, despite the ambitious goals many companies have set. However, significant progress can be made through collaboration, actionable targets and embedding sustainability throughout business operations. By aligning with official programs and methodologies and prioritizing a science-based approach, companies can navigate the evolving sustainability landscape while appealing to environmentally conscious consumers and positioning themselves for growth. The ongoing commitment to addressing Scope 3 emissions is crucial for building a more sustainable future. The Future of Climate Action conference provided valuable insights. As businesses continue to refine their strategies, the collective effort to address these emissions will be vital in achieving a sustainable and resilient future.