Businesses increase focus on supply chains to accelerate decarbonisation efforts

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  • 35% increase in businesses claiming they are investing more in improving supply chain resilience

  • 78% agree that companies can significantly address their carbon footprint through greater visibility of environmental outcomes across their supply chain

  • 51% of businesses have engaged external decarbonisation support

  • 13% of companies that have committed to decarbonisation cite value chain risks as a contributing factor for them doing so

Businesses are increasingly focusing on supply chains to combat their emissions according to new research. The data shows that over three-quarters (78%) of business leaders agree that ‘companies can significantly address their carbon footprint through greater visibility of environmental outcomes across their supply chain’.

“For many companies, Scope 3 emissions provide the biggest opportunity for decarbonisation, but they are also the most difficult to address as they are not directly under the company’s control,” said Michael Cox, APAC Director of Sustainability Consulting at Schneider Electric. “This lack of direct control makes open collaboration within and across industries imperative to ensuring corporate Australia can reach net zero carbon emissions targets.”

Based on a survey of over 500 business leaders, the Schneider Electric Sustainability Index, 2023 report highlights several key findings that shed light on the state of corporate sustainability efforts in Australia. The data shows a 35% rise year on year of the number of businesses that are planning to increase spending driving resilience in their supply chains. This shows that business leaders understand that they can’t maintain their operations and achieve net zero on their own.

The findings also underscore the importance of data transparency in sustainable practices, with 78% of businesses claiming that ‘digital is playing a key role in achieving sustainability goals’. By leveraging data throughout the supply chain in close collaboration with suppliers and partners, companies can identify areas for improvement and jointly implement strategies to reduce emissions.

As part of the survey, businesses were asked about their engagement with supply chains to drive emission reductions. The breakdown revealed that a substantial 51% of businesses are currently receiving external support to address decarbonisation actions. This external expertise is invaluable in navigating the complex landscape of emissions reduction and sustainability performance.

Interestingly, 13% of businesses that have committed to decarbonisation cited value chain risks as a contributing factor for their decision. From droughts and bushfires that impact production of goods, to energy and water security, climate change has the potential to impact supply chains across industries. Businesses understand this risk and the importance of proactively addressing environmental impacts to safeguard their long-term sustainability.

Currently, one-third (34%) of businesses plan to achieve net zero across Scope 1, 2, and 3 emissions by 2030. This ambitious target indicates a growing commitment to comprehensive sustainability measures that encompass the entire value chain. By taking a holistic approach to emissions reduction, businesses aim to make a substantial impact on the environment and align with global climate goals.

“Addressing climate change requires a collective effort. Collaboration and transparency across the value chain is the key to success,” said Michael Cox. “It’s encouraging to see that businesses are turning their attention to their supply chains in a bid to reduce their carbon emissions and I encourage those that are yet to start the journey to move on Scope 3 emissions now to be able to support the setting and achievement of their net zero targets.”

To gain valuable insights into sustainability as an economic imperative and the role of technology in driving transformation, download Schneider Electric’s Sustainability Index, 2023 report.

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