Why a supplier Code of Conduct matters for reducing emissions

To paraphrase the show tune, How Do You Solve a Problem Like Scope 3? It’s by far the most consequential emissions category, encompassing the whole value chain and so making up the vast majority of a company’s carbon footprint – sometimes up to 90 percent of it. But it’s also the hardest to grapple with. Being outside the direct control of the company, unlike its siblings, Scope 1 and Scope 2, bringing it down requires a certain degree of planning, creativity and determination – so much of it in fact, that at some companies, those responsible for sustainability feel overwhelmed.

To nail Scope 3, you need to spend a considerable amount of time engaging with your suppliers. Your suppliers will (with any luck) value your working relationship and be open to making changes to keep it going and indeed, to strengthen it. But that’s not to say their priorities will always be the same as yours, especially if the changes you’re asking them to make require a real investment of time and money. So communication matters. In fact, if you’re at one of those big companies with long, complex, perhaps global supply chains, bringing down your suppliers’ emissions is a matter of communication as much as it is about making practical interventions. Clarity and collaboration are your watchwords here.

The best way to begin this process is by creating a robust Supplier Code of Conduct. This is a statement of the various behaviours your organisation expects of its suppliers and their staff. It may extend to the whole supply chain and might include commitments about how your organisation will work with your suppliers to build trust and ensure compliance. And in this context, it’s basically an excellent way to set the tone: to articulate what you’re trying to do, how you intend to do it and what you want to see from your suppliers.

This points us to the relevance and importance of communicating about your mission and your values – buzzwords, admittedly, but nevertheless essential north stars for any business, and crucial aspects of any kind of collaborative sustainability work. You need to get across where you’re coming from – in other words, why you’re making demands of your suppliers. That knowledge will serve as useful motivation, sure to kick in at those moments when standards are liable to slip and the question arises, ‘Why are we doing this?’

But demands, or rather expectations, must be laid out. This is, fundamentally, what a Supplier Code of Conduct is all about: it establishes clear sustainability expectations. Living up to expectations over time is what makes them second nature and produces real and lasting change. Importantly, companies should convey that they are not expecting their suppliers to go it alone, and that there are sound commercial reasons for adopting their recommendations wholeheartedly. Companies have a pivotal role to play in increasing education, providing support, assessing practices and recommending improvements, and, in brief, empowering their suppliers at every turn to make changes and notice the benefits they bring.

Part of this will necessarily involve committing to improvement and innovation. In every field we are advancing all the time, and sustainability is no different. Best practices will need to be updated frequently. Companies will need to keep engaging with their supply chains to ensure they’re following the latest guidelines for good sustainability work. Swisscom’s Supplier Development Programme is an excellent example of how companies can bring about change by leading by example. Swissom works actively with its supply chain to accelerate its progress towards net zero emissions, something it has made integral to its identity as a business. Adopting a policy of ‘no supplier left behind’ has been crucial to its work. We’ve worked with Swisscom a lot on this, and the result has been not only reduction in supplier energy consumption, which is tied closely to Swisscom’s Scope 3, but also improved working conditions and productivity, and reductions in overtime, accidents and defects.

As with any big undertaking, the wisest thing to do is take things step by step, laying the foundations at the start and building from there. When it comes to Scope 3, there is a natural starting point, and it involves creating a robust Supplier Code of Conduct. Endorsed by senior managers and communicated to all stakeholders, it’s the best way to start ensuring compliance with laws, health and safety, human rights and sustainability practices. With one in place, you have set the foundations for getting those tricky Scope 3 emissions under control.

Graham Levey is an Operations Analyst at epi Consulting, an award-winning international sustainability strategy and supply chain consultancy. With over 30 years of experience working in Risk and Quality Management for BT Group, Graham has extensive experience and expertise in technology, telecoms, ICT and supply chain management.