There’s been a new surge of ambitious supply chain decarbonization efforts led by heavyweight companies like Amazon, SAP, and others. The reason? It’s likely that the looming SEC climate disclosure rule, now expected in October, has catalyzed action. Businesses are looking to stay ahead of the—again, potential—regulatory mandates and tackle the thorny issue of scope 3 emissions—those tied to supply chains, typically representing 80-90% of a company’s carbon footprint. Large-scale firms are setting the stage, choosing to tackle greenwashing head-on and truly drive climate action with stringent sustainability requirements for their suppliers.
Amazon’s recent sustainability report notably expands its decarbonization ambitions into the supplier realm. By 2024, Amazon suppliers must disclose their carbon emissions and reduction goals—an unequivocal push toward its 2040 net-zero goal. Seeing initiatives leap out of the retail sector into fresh terrains—such as software and tech, with SAP’s supply chain engagement program—means companies across sectors are finally doing something.
The newfound bid for ESG excellence includes greenhouse gas reductions from critical suppliers. What’s intriguing here are the market forces driving significant changes across the value chain. Transparency and detailed emissions reporting are rapidly becoming the norm, as retailers expect suppliers to align their efforts with customer expectations and goals. It’s a wave of change that’s set to ripple through the business ecosystem, influencing carbon reporting and ultimately driving a more sustainable future.
1. GreenBiz, “Get ready: Amazon will ask supply chain to report emissions starting in 2024,” https://www.greenbiz.com/article/get-ready-amazon-will-ask-supply-chain-report-emissions-starting-2024 Accessed on July 27, 2023
2. STAT News, “Major pharma companies call on their suppliers to reduce carbon footprints,” https://www.statnews.com/pharmalot/2023/07/21/climate-change-emissions-carbon-roche-gsk-sanofi-astrazeneca-merck-samsung-novo-nordisk-pollution/ Accessed on July 27, 2023
3. SAP, “SAP Focuses on Key Suppliers to Reduce Carbon Emissions,” https://news.sap.com/2023/07/sap-key-suppliers-reduce-carbon-emissions/ Accessed on July 27, 2023