Published 1 year ago.
About a 6 minute read.
Image: Sergio Souza
A collaborative, network approach is helping global companies meet their suppliers where they are and ensure they have the resources and know-how to rise to growing imperatives to reduce climate impacts.
Mitigating scope 3 emissions is one of the most sobering challenges for global
businesses. It’s also an area ripe with possibility for rapid and scalable
change. Large corporations are poised to collectively drive significant climate
action by engaging their suppliers to reduce carbon emissions across their
supply chain, but where do they begin?
During Climate Week, The Estée Lauder
Companies (ELC), Supplier Leadership on
Climate Transition (S-LoCT) and creative agency
discussed why reducing
wide-ranging emissions across supply chains is essential to meeting climate
goals, and how educating and supporting suppliers is critical to making the most
of the “decade of
With a presence in over 150 countries, ELC is using its scale to advance climate
action across its supply chain; the cosmetics giant says it has made significant
its science-based goals, particularly regarding scope 1 and 2 emissions. Like
other companies, though, ELC has found that scope
— that pernicious monolith outside an organization's direct control — is where
the real emissions-reduction challenge lies (95
of ELC’s emissions are scope 3).
The company solicited feedback from its suppliers on what challenges they faced
in meeting emissions-reduction targets, and it was remarkably similar: Across
the supply chain, there’s a know-how and resources gap. ELC’s suppliers needed
help with climate
and accessing tools to set and meet climate goals.
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To this end, ELC brought 50 of its suppliers into
— an offshoot of the consulting firm Guidehouse
facilitating climate training for supply chains. S-LoCT is a plug-and-play
approach to supplier education and action, guiding suppliers through different
tracts designed to educate and inspire climate action. Guidehouse’s S-LoCT
program works with the top 40-50 suppliers in a company’s supply chain,
cross-referencing each supplier to check if it’s already gone through the
This network effect is powerful, said Meghan Ryan, Executive Director of
Responsible Sourcing at ELC. S-LoCT’s universal verification process allows
brands to “share” suppliers and swap in ones that have already gone through the
“When we think about scale and the urgency of the challenges ahead of us, coming
together is the fastest way for us to reach the maximum number of suppliers,
because we do have many that are shared,” she said.
One ELC supplier in the S-LoCT program is Tag. The agency was in the process of
grappling with policies, systems and management techniques to address its
emissions. As Tag Sustainable Sourcing Manager Kate Jolly attested, upward
and downward support are important for those companies sitting in the middle: S-LoCT helped them double-check work, identify areas of improvement, and confirm
areas where it's doing things right. Now, Tag is close to setting its own
science-based targets; but some of ELC’s other suppliers don’t even know how to
calculate their carbon footprints. The S-LoCT program helps them make
incremental steps in identifying impact, crafting science-based targets, and
embedding meaningful ways to drive change.
“All of these achievements we see as stepping stones to action, which is what we
all need to see,” Ryan said. “This is an urgent time to see suppliers taking
action. But we need the fundamentals in place.”
Frameworks such as the Greenhouse Gas Protocol and Science Based Targets
Initiative are primarily designed for Fortune 250 companies; S-LoCT has
retooled how they are taught and coached — making corporate-speak frameworks
more attainable, accessible and engaging for smaller suppliers. Enlivening the
mission through storytelling is essential for capturing the attention of
consumers and suppliers alike. Good storytelling resurrects successful climate
action from the doldrums of sustainability reports and elevates it to a national
“A lot of this stuff is really dry, and it can be really boring,” said Matt
Banks, Associate Director of Energy, Sustainability & Infrastructure at
Guidehouse. “It’s accounting; and you don’t want to make it feel like
accounting, you want to make it feel like you're saving the world.”
S-LoCT also serves as a good barometer for supplier engagement — allowing brands
to view their suppliers’ attendance record and homework status; and give the
occasional nudge, if necessary. S-LoCT is also a hub of support connecting
suppliers to commercial contacts and other help resources should they hit a
Collaboration — a theme of Climate Week — is also a key component of the S-LoCT
program. The network effect of a collaborative approach means self-correcting
feedback loops, spurring organic progress among supplier cohorts.
Boosting supplier performance through guided action steps isn’t rocket science,
Jolly said; but being surrounded by a network of supportive collaborators and
peers is essential in tipping the balance. Clients such as ELC have a major role
to play in engaging their brands internally and consumers externally.
Still, many companies haven’t put a firm line in the sand on science-based
targets for suppliers — an issue that must be rectified if industry wants to be
a part of saving the planet. That’s a sweet spot of an organization such as
S-LoCT: Even if company A doesn’t demand emissions reductions from a supplier,
company B likely shares the supplier and can incentivize it to change for all
The barriers to deeper collaboration are lack of access to capital, lack of
management attention and lack of expertise, Banks said. S-LoCT provides
expertise, but most companies in its cohorts still need management and capital
boost. He pointed to Johnson & Johnson’s capital relief
fund — from which any of
its 200 operating companies can draw to help with a climate project they want to
There are many ways to influence a supply chain; and it can be too easy to break
a potential collaboration by using a stick, instead of a carrot. It's easy to
overwhelm suppliers with tons of action items and risk compromising a
relationship; they often need more robust assistance in getting started on their
sustainability journey. For both ELC and S-LoCT, starting somewhere — and doing
so diplomatically — is the only way forward.
“You need those suppliers, so there’s this dance that needs to be done that must
be done extremely carefully,” Banks said. “It has to be a diplomatic process,
just like everything with climate change.”
Published Oct 11, 2022 11am EDT / 8am PDT / 4pm BST / 5pm CEST
Christian is a writer, photographer, filmmaker, and outdoor junkie obsessed with the intersectionality between people and planet. He partners with brands and organizations with social and environmental impact at their core, assisting them in telling stories that change the world.