This article was written in collaboration with Théo Boucherie, a carbon consultant at Sustainscale
As the effects of climate change become increasingly evident, businesses are facing rising pressures and incentives to adopt more sustainable practices. In this context, implementing a responsible purchasing policy is emerging as a vital strategy. When thoughtfully designed and aligned with environmental and social objectives, such a policy helps businesses navigate an ever-evolving landscape effectively.
But what exactly is a responsible purchasing policy? Learn more here. At its core, it’s a framework of principles, rules, and procedures that guide a company’s purchasing decisions. These goals may include cost reduction, quality improvement, and, increasingly, the integration of environmental and social criteria. A responsible purchasing policy becomes a key driver in improving corporate environmental performance, setting goals such as reducing greenhouse gas (GHG) emissions. Beyond its environmental impact, it also supports human rights, fair worker compensation, and the promotion of local supply chains.
This article explores how responsible purchasing policies impact corporate environmental performance, particularly through reducing indirect emissions, which can constitute up to 90% of a company’s total GHG emissions.
I. Reducing Indirect Emissions Through Responsible Purchasing Policies
I.a) Categories of GHG Emissions
GHG emissions are categorized into three scopes:
- Scope 1: Direct emissions from a company’s operations (e.g., buildings and vehicles).
- Scope 2: Indirect emissions from energy consumption (e.g., purchased electricity).
- Scope 3: All other indirect emissions across the value chain, including upstream and downstream activities such as transportation, purchased goods and services, and employee commuting.
Scope 3 emissions, which originate outside the organization’s direct operations, are often the most challenging to measure. Companies must rely on averages, estimates, or, ideally, collaborate with suppliers to obtain accurate data. Notably, the indirect emissions of one company are often the direct emissions of another. Suppliers are therefore uniquely positioned to provide reliable and precise information.
I.b) GHG Emission Inventories: A Strategic Tool for Purchasing Decisions
A GHG emissions inventory is an essential diagnostic tool for businesses aiming to understand and address their environmental impact. It measures both direct and indirect emissions, providing a comprehensive overview to guide strategic decision-making.
Including Scope 3 emissions in the inventory is critical for identifying all sources of emissions and implementing effective reduction measures. While protocols like the GHG Protocol or Carbon Balance Methodology do not mandate it, conducting a supplier-based analysis is instrumental in driving emission reduction efforts.
By pinpointing the main sources of indirect emissions, companies can prioritize sustainable suppliers, leading to significant overall emission reductions.
I.c) Supplier Contributions: The Role of Supplier Questionnaires
It is possible to raise awareness and engage your suppliers from the very beginning of your initiative by inviting them to participate in your inventory process through a dedicated questionnaire. In addition to educating your suppliers about environmental challenges, this questionnaire can include questions about whether they have conducted a carbon footprint assessment, their commitment to emission reduction goals, and their current sustainability practices. This approach helps you better understand the impact of your supply chain, identify the partners most committed to eco-friendly practices, and enhance transparency.
Below is an example of how supplier contributions affect various Scope 3 emission categories:
| Emission Category | Impact of Suppliers on These Emissions |
|---|---|
| 3.01 – Purchased goods and services | +++++ |
| 3.02 – Capital goods | ++ |
| 3.03 – Fuel- and energy-related activities (not Scope 1 or 2) | + |
| 3.04 – Upstream transportation and distribution | ++++ |
| 3.05 – Waste generated in operations | +++ |
| 3.06 – Business travel | + |
| 3.07 – Employee commuting | – |
| 3.08 – Upstream leased assets | – |
| 3.09 – Downstream transportation and distribution | – |
| 3.10 – Processing of sold products | + |
| 3.11 – Use of sold products | + |
| 3.12 – End-of-life treatment of sold products | ++ |
| 3.13 – Downstream leased assets | – |
| 3.14 – Franchises | – |
| 3.15 – Investments | – |
II. Optimizing Responsible Purchasing Policies for Better Environmental Impact
II.a) Engaging Teams: Creating a Dedicated Charter
The first step is to educate and involve internal stakeholders. Developing a responsible purchasing charter aligned with the company’s sustainability goals formalizes this commitment. The charter should include clear environmental criteria for selecting suppliers and products. Internal training sessions on environmental issues, such as optimizing packaging or choosing eco-friendly transportation methods, can further empower teams.
II.b) Supplier Engagement: The Heart of a Responsible Purchasing Policy
Engaging your suppliers in an ecological approach involves establishing strong and transparent partnerships. This can include incentive-based contracts for emission reductions or regular monitoring of their environmental performance.
Walmart’s Gigaton Project serves as an excellent example. Aiming to reduce supply chain emissions by one billion metric tons by 2030, Walmart has successfully involved over 6,000 suppliers. The program encourages voluntary participation through certification and offers tools to track energy management, waste reduction, packaging efficiency, and transportation optimization. Walmart achieved its goal in 2023, highlighting the power of collective action.
II.c) Tracking and Evaluating Progress
Monitoring and evaluating environmental initiatives is essential to ensure tangible results and adjust strategies as needed. Regular carbon assessments allow businesses to track their emission reductions and demonstrate their efforts to stakeholders, including customers, suppliers, and investors.
Implementing Key Performance Indicators (KPIs) is crucial for long-term evaluation. Examples of KPIs include:
- Reductions in Scope 1, 2, and 3 emissions.
- Improvements in energy efficiency.
- Increases in the number of suppliers committed to sustainable practices.
By setting measurable goals, companies can showcase progress and adapt their strategies proactively.
Conclusion
A responsible purchasing policy is a powerful tool for enhancing corporate environmental performance. By leveraging diagnostic tools, fostering sustainable partnerships, and implementing emission reduction strategies, businesses can minimize their carbon footprint, strengthen relationships with partners, and reduce costs.
To begin your transformation today, partner with experts like Lolita Vérité and Sustainscale. Their tailored solutions can help you establish a responsible purchasing policy, define relevant KPIs, and adjust strategies to maximize your environmental impact.
About the Author
This article was written in collaboration with Théo Boucherie, a carbon consultant at Sustainscale. Sustainscale helps businesses measure and reduce their GHG emissions, empowering them to become sustainable and profitable organizations.
