Unlocking net-zero: Why supplier engagement is key for driving sustainable transformation

As companies worldwide commit to ambitious net-zero targets, the role of supplier engagement in driving sustainability efforts has never been more important. At EcoAct, we understand the challenges businesses face in navigating this complex landscape. EcoAct experts, Phyll McNeile and Robyn Thompson, from our supplier engagement team, share their insights and expertise on why supplier engagement is key for driving sustainability, innovation, and long-term transformation.

The importance of supplier engagement in tackling Scope 3 emissions

As the world intensifies its efforts to combat climate change and achieve net-zero emissions by 2050, many organisations are now faced with the challenge of reducing emissions which stem from their supply chains.

Typically, the majority of a company’s carbon footprint lies within its supply chain—or Category 1 (Purchased Goods and Services) and 2 (Capital Goods) Scope 3 emissions, yet these emissions are often not prioritised in carbon reduction plans due to the complexity of measuring and accounting for them.  

Companies are now being called upon to be transparent about Scope 3 emissions, which may fall outside their direct control, but remain within their sphere of responsibility. Measuring and managing Scope 3 emissions and developing broad-scale decarbonisation measures throughout supply chains is one of the most pivotal and impactful pathways towards achieving global net-zero emissions.  It also enables companies to set science-based targets and help bolster performance rankings in sustainability indices.

By engaging with suppliers, companies can gain visibility into these emission sources, identify areas for improvement and drive meaningful reductions. Effective supplier engagement is a powerful and transformational tool for driving sustainability, innovation, and long-term success.

What is supplier engagement and why does it matter?

Supplier engagement is a set of mechanisms or interventions implemented both internally and with suppliers to create more decarbonised and resilient supply chains. Effective supplier engagement also goes beyond reducing emissions—it creates value by optimising business operations and building stronger relationships.

Moving away from spend-based industry average emission factors in favour of supplier-specific emission factors enables suppliers’ decarbonisation initiatives to be quantified and accounted for within your Scope 3 calculations. In addition to tracking supplier performance year-on-year against net-zero targets, supplier engagement allows you to:

• Enhance transparency and accountability across your supply chain
• Mitigate climate risks and build resilience against future disruptions
• Strengthen your brand reputation and attract socially conscious customers
• Drive cost savings and operational efficiencies through innovation and optimisation
• Assess supplier sustainability-related maturity and highlight areas for improvement, supporting a two-way dialogue and providing opportunities for collaboration and innovation
• Achieve your sustainability goals and contribute to a more sustainable future

The key to effective supplier engagement

Supplier engagement can be a complex process, however there are several things that you can do to enhance the effectiveness of supplier engagement activities.

Firstly, we recommend starting by targeting your most material suppliers in order to optimise time and resources. For example, engaging with suppliers that comprise the top 80% of supply chain emissions will ensure the greatest impact.

Alongside this, enhanced training and collaboration opportunities for suppliers will support with educating them on your own journey and targets as well as how they might tackle key topics including calculating GHG emissions, setting targets and decarbonisation initiatives etc. This will support them on their own journey and allow you to understand any blockers they might be facing.

Finally, utilising digital tools and software to enhance data quality will ensure auditability and efficiency across your organisation. At EcoAct, our supplier engagement team is developing a tool to automate the quantification of publicly available data for the creation of supplier-specific emission factors and emission target trajectories. Set to launch later this year, this will reduce the need for additional questionnaires and saves time for both you and your suppliers.

EcoAct’s four-step approach to supplier engagement

At EcoAct, we believe in practical, actionable solutions that deliver real results. That’s why we’ve developed a four-step approach to effectively engaging with your suppliers:

1. Identify your material suppliers: Prioritise suppliers with the most significant impact on your emissions
2. Engage your procurement team: Align internal processes and policies with sustainability best practices
3. Collect primary data and highlight opportunities: Gather accurate supplier-specific data and identify areas for improvement
4. Model supplier targets and track progress: Set ambitious targets and monitor progress over time to achieve net-zero emissions

This approach is underpinned by two core objectives of a supplier engagement programme. Firstly, improving data quality in Scope 3 footprints, to ensure supplier decarbonisation efforts are realised within reporting. Secondly, encouraging and facilitating supplier decarbonisation ambitions and ultimately creating a space for collaboration and two-way education within the supply chain.

By leveraging our expertise, our approach has helped companies transform their supply chains and support their wider sustainability and net-zero goals. Our experts help companies reduce emissions and resource consumption while enhancing supplier relationships and collaboration. In turn, companies have experienced an improvement in brand reputation and stakeholder trust while positioning themselves as leaders in sustainability and their respective industries.

Looking beyond Scope 3 and getting started with supplier engagement

Looking beyond Scope 3 as a focus for supplier engagement, there are natural links with other core areas of sustainability where supplier engagement can drive improvements. Namely, the assessment of climate risk within the supply chain, collecting Life-Cycle Assessment data for carbon footprints, the setting and achievement of supplier engagement Science-Based Targets, creating action plans or transition plans for achieving company targets and alignment to voluntary reporting frameworks such as CDP and Ecovadis.

EcoAct experts can support your organisation to implement an effective supplier engagement programme. Whether you’re just starting your sustainability journey or looking to accelerate your existing efforts, EcoAct can support you every step of the way. If you want to learn more about supplier engagement and EcoAct’s four-step approach, download our new factsheet or get in contact with our experts.