BC3 Members: Reach out to bc3@bc3sfbay.org if something needs updating

As soon as you have buy-in from leadership to set a supply chain target, your team should be building a plan for internal implementation. 

4A. ALIGNING ON PROGRAM OWNERSHIP

Aligning on expectations of ownership and decisions of bandwidth should be decided earlier on when preparing and setting the supplier goal. These decisions could include budget, headcount, and ownership. 

The SBTi does a great job outlining guidance on designated role examples for a supplier engagement program (see Section 4.1 of the SBTi Guide).

4B. SET UP YOUR PROCUREMENT TEAM TO ADVANCE SBT PROGRESS

i. ALIGNING WITH PROCUREMENT

This section is about process integration (embedding SBTs as a priority in your procurement organization) for all suppliers, not just new suppliers. BC3 Practitioners recommend scheduling meetings with the procurement team to discuss a number of important items.

ii. COMMUNICATING SUPPLIER REQUESTS

Following initial meetings, meet with Procurement to dive deeper into process integration. Embedding SBT supplier targets in company documents and processes helps ensure consistent communication to suppliers and across your company. Below are 

iii. ENGAGING BUSINESS PARTNERS TO ADVANCE SBT PROGRESS

Build internal allies beyond just procurement, especially for key suppliers. Business departments who are making the purchases are likely in the most frequent contact with the supplier, and will be critical to engage (ex. Real Estate & Data Center teams, etc). They may also be informed about potential changes to your business relationship with a particular supplier than your sourcing team. Empower business units (outside of procurement) that own supplier relationships to bring up the “request to set SBTs” in supplier meetings.

• Procurement teams may prefer that they bring this up with suppliers directly, rather than having internal stakeholders request this of companies. This is a key decision and alignment area with procurement teams.

• Aligning sustainability asks with commercial negotiation strategy is key. Usually sourcing leads and  business owners can help decide on when and how to best negotiate with suppliers. 

• Educate supplier relationship owners, who are not in procurement, about SBTs, timelines and how to influence suppliers to set SBTs

• Arm business unit partners with a deck that outlines what the ESG & Procurement teams want the business unit to communicate about why your company’s SBT goals are critical for all large business relationships (refer to section 4B above for resources) and create supplier profiles so partners understand where suppliers are in their climate/SBT journey

vi. DETERMINING YOUR EXPECTATIONS FOR SUPPLIERS

The SBTi guide (Section 4.2) says “There is just one core criteria for supplier engagement targets: whether the supplier has set an SBTi-aligned target within the five-year target timeframe”.

You will need to determine what your organization will request of your suppliers. BC3 Practitioners include the following examples: 

• Measure and report their GHG emissions– Scope 1 & 2 ideally, and also Scope 3.

*In section 4.5 of The SBTi guide it states, Suppliers should have the option to report multiple targets (for example, a scope 1 and 2 target and a separate scope 3 target).

• Report any climate targets, SBTs, Net Zero goals, and/or renewable electricity commitments.

*Current SBTi guidance is unclear on the definition of “SBT-aligned” targets set by your suppliers, the BC3 Supply Chain Practitioners Working Group is working to get more clarity from SBTi on this, and they are also working to align on a current best practice among working group members.

• Set and implement an emissions reduction target.

• Salesforce’s Supplier Sustainability Program Guide provides a comprehensive overview of their expectations for suppliers 

v. COMMUNICATIONS STRATEGY FOR SUPPLIERS

Once you have aligned internally on your target and established your expectations of suppliers, you will need to communicate this to your suppliers. For BC3 Practitioners, communication with suppliers has included an initial letter or notice of their expectations; follow-up messaging with resources, programs, and tools; and requests for data and reporting, among others. Sections 4.2 and 4.3 of the  SBTi guide introduce some of the key considerations in Supplier Communications. 

Before starting outreach to your suppliers, BC3 Practitioners recommend putting together a high level communications strategy for suppliers. 

Here is another way to think about strategizing your communications and engagements with suppliers:

vi: EXAMPLES OF SUPPLIER COMMUNICATIONS

The SBTi Guide (Section 4.3) speaks to how and why it’s important to communicate with your suppliers. BC3 Practitioners note that it can also be helpful to have a simple and clear public webpage listing your supplier goals that you can share both internally with various departments and externally with all stakeholders. 

Sending a personalized email & software platform can help create a stronger outreach program. Include a description of why you are asking for this information from suppliers, and how it rolls up to your goals.  

Tips for a successful outcome:

• Manual/individualized outreach can have the highest success rate.

• Outreach from leadership (C-suite or head of business units) may result in a higher engagement rate.

• Make sure the correct contact at the organization is being communicated with.

vii: COLLECTING SUPPLIER DATA

The SBTi Guide (Section 4.5) provides guidance on things to consider when choosing a data collection system, and explains the importance of working to reduce survey fatigue amongst suppliers.

Below are some examples of potential sources of data. It is a best practice to account for continuous improvement of data.

• Internal Surveys

• SBTi database

• SME Climate Hub data reporting tool (no fee, public commitment required)

• Third party data collection from suppliers (fee associated)

• CDP Supply Chain

• EcoVadis

• Watershed Supply Chain Module

Below are examples of data collection tools, as published in Section 4.5 of the May 2023 SBTi Supplier Engagement Guide:

Source: May 2023 SBTi guide 

Below are additional data collection solutions for tracking, collecting and measuring supplier progress that some BC3 Practitioners use to measure progress towards a target. Tip: Your emissions estimate is only as good as your data inputs. 

• Watershed

• Salesforce Net Zero Cloud

• Emitwise

The SBTi Guide (Section 4.5) covers what data is required from suppliers to set SBTs (see figure 11 below):

According to the SBTi, Suppliers should have the option to report multiple targets (for example, a scope 1 and 2 target and a separate scope 3 target). 

Although primary GHG emissions data is not required to track progress against a supplier engagement target in the near-term, in the long-term it will be necessary to track reductions in supply chain emissions. It is also an indicator of where suppliers are in their journey and enables review of the quality of emissions data being reported.

Source: May 2023 SBTi Supplier Engagement Guide 

viii: DATA ISSUES & QUALITY CONSIDERATIONS

• Finding the correct contacts who will ensure data is provided accurately can be hard. Many primary supplier contacts are accounts payable. It can be helpful to review your contact list with supplier relationship managers to ensure you’ve got current data, who likely has a touchpoint with the supplier’s account lead. If you’re able to get it, it can be helpful to copy both an account representative who is motivated to respond and someone from the sustainability team (if one exists) who can provide accurate data. In communications, you can recommend that the contact coordinate with the appropriate teams internally before responding.

• • • • 1. If you are sending a data request in a format that is hard to share, it can be very helpful to provide a link or PDF of all the questions/requests included. This will help the recipients know who to engage with internally and coordinate their response internally. 

• Spend-based data has limits. Most companies (even large ones) are using spend based data and some are developing methodologies for swapping out spend-based data with higher quality supplier emissions data.

*Some BC3 members are working with their auditing firms to explore methodologies for screens and approaches for improving data quality in annual disclosures. BC3 will share any learnings that come forward from our Supply Chain Practitioners Working Group.

• Salesforce 2024 White paper on supplier data approaches

• How will your company define “science based targets” for your suppliers? 

• • 1. 1. 1. Does it need to be validated by SBTi? 

          2. If not, how will you validate those other targets?

          3. Example:  Salesforce uses something like this if suppliers do not have an SBTi validated target.

NOTE:

BC3 Practitioners have identified a potential opportunity to align on data reporting best practices, and are still working to decide on a unified approach.

In the meantime, one recommendation is to increase transparency when reporting on % of suppliers that have set SBTs and/or committed to setting SBTs from your supplier base.

Example:

If Company X says “46% of our suppliers have set SBTs to date," include metadata like this:

• • • • 50% of these are validated by SBTi and 50% are not validated by SBTi

      • And/or list the commitments or sources of other targets or commitments you include in your data