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Carbon management

Explore what carbon management is, why it's important and how supplier management plays a pivotal role.

What is carbon management?

Carbon management is about understanding how and where an organisation’s activities generate greenhouse gas emissions, to then minimise emissions in an ongoing and financially sustainable way. It encompasses both internal operations and the use of an organisation's goods and services, with the goal being to incorporate knowledge of carbon data into strategic business decision-making.

Carbon management is also about understanding how to calculate an organisation’s carbon footprint, however, it’s not just about how the product is produced that is important. It’s the whole life cycle of a product or service. There’s the fuel to move raw materials, shipping and delivery and how the end product is going to be used by the end consumer. It’s important to factor all of this is when measuring and reporting on your carbon footprint and identify where further reductions may be needed.

 

How to use the positioning matrix

The following matrix helps you to identify your greatest ESG risks against the maturity of your supplier management processes. Take a look below at some tips and things to consider when looking at supplier management and risk.

Supplier management maturity

Target
"Value Add"

Best Practice

Build Foundations

Build and Prioritise

Risk

Target value add

When procurement and supply procedures are sound and there are no significant demands or risk, then time is best spent on researching supply chains and supply options.

Build foundations

Risk and criticality can evolve and escalate, so start to build the foundations for procurement and supply management to mitigate future risk. Implement best practice approaches

Best practice

Where there is a higher risk profile you should seek to leverage strong relationships Utilise best practice approaches from these relationships to apply to other suppliers and/or risk areas

Build and prioritise

This is the highest priority area to focus your efforts. Critical supply chains and risks must be addressed immediately by implementing best practice supplier management approaches.

 

How to map your greatest carbon risk within your supply chain

Understanding the demand and supply impacts and influence you have in your organisation and the wider supply chain, can help inform your strategic approach to carbon management, especially when addressing scope 1, 2 and 3 emissions.

Swipe to right to see full model

Demand impacts Supply impacts Scope 1 Direct emissions Scope 2 Direct emissions Greater influence Less influence Scope 3 Direct emissions Market insights Strategic alignment Supply enablement Supply response

Large number 1

Step 1: Strategic alignment

Step 1 aims to align corporate ESG expectations, carbon management corporate strategy and objectives.

  • Determine SMART objectives and ESG targets.
  • Define emissions footprint and alignment to the carbon management strategy.
  • Define performance gap.
  • Alignment of regulatory reporting by region.

Large number 2

Step 2: Supply enablement

Step 2 aims to align the corporate strategy with procurement and supply strategies to support and mobilise carbon management objectives. Procurement teams should collaborate with internal business partners and suppliers to seek out solutions that deliver on the corporate objectives.

  • Prioritise and align procurement and supply strategic focus areas and opportunities.
  • Enable business collaboration, partnerships and integration with key suppliers.
  • Identify barriers and develop supplier capability initiatives.
  • Create a delivery plan and determine roles.
  • Measure and report progress.

Large number 3

Step 3: Market Insight

Step 3 aims to define your scope 3 strategy, objectives and supply chain impacts.

  • Review market insights risks, and trends.
  • Identify market innovation and improvement options.
  • Business case development to obtain funding based on commercial validation.

Large number 4

Step 4: Supply response

Step 4 aims to develop scope 3 supply response priorities, network partners, transparency and influence strategy

  • Analyse supply risk and prioritise key areas.
  • Establish supplier collaborations.
  • Initiate sourcing and strategic partnerships.
  • Develop and implement a strategy roadmap.
 

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Sustainability key themes

Sustainability content hub What is sustainability?
Sustainable procurement Circular procurement
Carbon management Ethical Procurement
 

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