Why Supplier Climate Disclosure Requirements are Growing
Customer-mandated climate data disclosure requirements are ramping up for suppliers, forcing many to calculate their carbon footprint for the first time.
While the spotlight often falls on enterprises when it comes to sustainability initiatives, suppliers play a crucial role in the value chain and wield significant influence over environmental impact. As a collective, supplier emissions, part of scope 3 emissions as outlined by the GHG Protocol, often make up over 75% of a large enterprise's carbon footprint. Embracing sustainability, specifically carbon management, as a supplier will prepare you for climate disclosure requirements and secure a competitive advantage within your industry.
Climate disclosure for suppliers is the process of reporting greenhouse gas (GHG) emissions after calculating their carbon footprint. This practice is relatively new and continues to grow as more enterprises are required to disclose climate related risks and emissions.
Why Should Suppliers Embrace Sustainability?
Historically, net zero commitments have been made voluntarily by enterprises but with growing government-mandated climate disclosures in states like California as part of Climate Corporate Data Accountability Act (SB 253), the number of enterprises focused on reducing carbon emissions is growing. How does this affect enterprise suppliers? Well, any supplier wanting to continue a partnership with an enterprise customer may also be asked to calculate and reduce their own carbon footprint, disclosing emissions data annually to their customer.
We’ve seen supplier sustainability requirements from Microsoft, Walmart, and Target, with a growing number of enterprises rolling out new and expanded programs each year. This uptick is also related to net zero target dates that are quickly approaching. Many enterprises have been focused on internal changes to reduce scope 1 and 2 but are still falling short of reduction targets, they must look to their supply chain for ways to further reduce emissions. For suppliers, fulfilling sustainability requests is a necessity to retain these customers and remain competitive to win new business.
Staying Ahead of Climate Disclosure: The Supplier Imperative
As climate regulation pressure grows, staying ahead of climate disclosure requirements is crucial for suppliers seeking to maintain and create successful partnerships. Here's why:
Competitive Advantage: Transparently reporting greenhouse gas emissions and sustainability initiatives enhances a supplier's reputation and credibility in the eyes of customers, investors, and other businesses. By proactively disclosing climate-related information, suppliers can build trust and become prime contenders for new partnerships. Enterprises want to work with suppliers willing to fulfill climate disclosure requests and implement sustainability initiatives throughout operations.
Regulatory Compliance: As governments worldwide implement stricter regulations to combat climate change, suppliers that proactively address sustainability risks gain a competitive advantage. By aligning with regulatory requirements and industry standards, suppliers can avoid penalties, positioning themselves as trusted partners for enterprises seeking sustainable supply chain solutions.
Sustainability is imperative for suppliers looking to thrive in today's business environment. By embracing sustainability, decarbonizing your business, and transparently disclosing climate-related information, suppliers can not only meet evolving market expectations but also secure a competitive advantage.
At RyeStrategy, we know this task is not easy, especially for small to medium sized businesses who don’t have internal sustainability employees on staff. We specialize in assisting suppliers in accurately fulfilling enterprise climate disclosure requests at affordable pricing. We understand and have created solutions to address the challenges suppliers face in meeting these requirements and capturing accurate data. Speak with a sustainability manager today to learn more about how we can support your climate disclosure efforts, and read about our successful collaboration with RedCloud in completing their climate disclosure request here.
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About RyeStrategy
Based in Seattle, RyeStrategy is a CDP-accredited, mission-oriented company specialized in carbon accounting, mitigation coaching, and climate disclosure solutions for organizations at any point in their sustainability journey. Learn how RyeStrategy helped Salesforce, Ideascale, and Wazoku achieve their sustainability goals.
From exhaustive carbon footprinting and mitigation coaching, to setting science-based targets and reporting climate data to CDP, SBTi or custom reporting platforms, RyeStrategy acts as a hands-on extension of the team, custom-tailoring services to fulfill climate disclosure requirements easily and accurately.
Meet with a sustainability specialist to learn more about RyeStrategy solutions.
