Suppliers are increasingly being asked by their customers to disclose their environmental, social, and governance data. As companies declare their intentions to achieve Net Zero across their entire supply chain by a future date, often 2050, they require their suppliers to contribute to achieving these goals. This is driven by customer expectations and growing regulatory pressure. More and more, sustainability criteria are being considered in purchasing decisions.
Large corporations often have thousands, sometimes tens of thousands, of direct material suppliers. Engaging suppliers in this process is a monumental task. EcoVadis is increasingly recognized as the organization to turn to for help in accelerating the collection of upstream supplier environmental, social, and governance data. EcoVadis, a purpose-driven, for-profit corporation based in Paris, France, is leading in this area.
EcoVadis and Supplier Assessment
Annually, EcoVadis clients request their suppliers to undertake EcoVadis’ assessment of a supplier’s sustainability performance, which includes a carbon assessment. The data, reported on the EcoVadis platform, highlights the supplier’s emissions. The data collected from the assessment is used to provide an internal sustainability scorecard that is shared by the supplier with their customers (the buyers). The Carbon Action portion of these scorecards benchmarks a supplier’s ability to collect and disseminate emissions data. A supplier’s Scope 1 emissions become part of a buyer’s Scope 3 emissions. In essence, the reported supplier data contributes to a buyer’s Scope 3 calculations.
Schneider Electric and EcoVadis
Christophe Quiquempoix, VP of Sustainable Procurement at Schneider Electric, shared his insights during a panel discussion at the EcoVadis Sustain Conference 2023. He explained that the first step was to set internal emission targets, which included:
- Carbon neutral across scopes 1 & 2 by 2025
- 50% reduction in emissions by 2025 for operating suppliers
- Carbon Neutral up and down the entire value chain by 2040
The Journey to Net Zero
After setting internal emission targets, Schneider Electric turned to their suppliers and asked them to set their own emission targets. The main goal was to have suppliers start their own decarbonization journey. Schneider Electric constructed a “full framework” of tools, resources, and offered collaboration opportunities dedicated to sharing strategies on reducing emissions. Some of the resources made available to the suppliers included an online digital platform, “Neo Network” that provided training videos. A “Digital Emissions Calculator” for suppliers that still had issues with calculating their carbon footprint. Internally they launched the “Supply Chain Renewable Initiative” that provided suppliers access to renewable energy.
The project was officially launched in 2021 and by spring of 2023, 1,015 suppliers were still actively engaged within this program. This resulted in a 10% reduction in emissions across the supplier network.
