net zero

What does it mean to be net zero?

Put simply, net zero is the balancing of the amount of greenhouse gases (GHG) produced versus the amount removed from the atmosphere. By reducing and removing emissions from the environment, an organisation can achieve net zero and ensure that what they add is no more than what they take away.

Source: National Grid

The value in quality data and collaboration

For most organisations, carbon accounting practices are by and large at the same level that it was more than 30 years ago. This data immaturity is most noticeable in Scope 3 emissions, which is often spread across multiple spreadsheets or systems, with processing done inconsistently and often relying on secondary data. Though this approach could fly under the radar when used solely for annual sustainability reports, future-ready businesses will need much more accurate, granular, timely and transparent emissions data to maintain their positions in the industry and meet their ESG goals.

To tackle this data gap, collaboration with value-chain partners and alliances that matter will be crucial to build out emission data sharing networks and new supply ecosystems in order to generate a real impact.

“Building, nurturing, growing, and creating impact from alliances can require significant effort, especially in new territory, such as setting industry standards for carbon accounting or defining decarbonisation best practices in specific raw materials. To avoid spreading themselves too thin, a company can keep a map of its relevant alliances, ecosystems, and partners, regularly assessing their impact potential against effort, and doubling down on a few,” highlights McKinsey.

Early preparation and engagement

“You can’t start your sustainability journey unless you know where you are, and where you want to go,” states the Crown Commercial Service. It is important to consider sustainability as early as possible in procurement. Identify the pain points, priorities and risks within the organisation that can then be outlined as the core themes for suppliers to focus on.

However, it’s well-known that 70% of transformations fail despite best efforts, so sustaining engagement with net zero will also be vital in achieving initiatives and goals. Education, maintaining momentum, and keeping up with innovations, technologies and new alliances will be top priorities for those leading the charge. Being clear from the outset on the desired sustainability outcomes and internal policies will also help to drive engagement.

As a result, Scope 3 – of which procurement is responsible for the largest proportion of — will be vital for supply chains going forward if they are to become net zero. The key will be for organisations to tackle the missing link between corporate and operational levels in procurement by working together holistically. Pennicke concludes that connecting the corporate and operative carbon footprint by deriving and prioritising mitigation strategies along the value chain, procurement and the wider supply chain can realise results according to ESG targets.

Eight fundamentals for sustainable procurement practices

• Understanding global, regional, and local actions

• Support from mission, culture, strategy, and people

• Corporate Social Responsibility (CSR) commitment from leadership

• Successful integration of strategic and operational decision making

• Performance measurements and appropriate reward systems

• A systematic risk management approach

• Transparency and wellstructured communication

• Seeing sustainability as an opportunity for innovation