How are SMEs affected by net zero efforts of their customers? - 100% Renewables

How are SMEs affected by net zero efforts of their customers?

Initiatives being taken by large corporations to reduce their carbon footprint and accelerate the transition to net zero can filter through to SMEs (Small and Medium-sized Enterprises) in a number of ways. As larger companies work to reduce their carbon footprint and achieve net zero emissions, they may require their suppliers to do the same. This can create a ripple effect down the supply chain, with smaller businesses being required to measure and reduce their emissions to maintain their relationship with the larger company.

And as larger companies are increasingly taking a public stance on climate change and other sustainability issues, this can impact the reputation of SMEs that work with them, as customers and other stakeholders may expect smaller businesses to also demonstrate a commitment to sustainability to maintain a positive brand image.

We have also created a video of the content in this article.

Woolworths Group’s scope 3 emissions

Here is an example of how a big retailer is driving change in its supply chain.

The Woolworths Group emits 2 million tonnes of carbon emissions across their scope 1 and 2 sources, and they already have a roadmap for how they will address their scope 1 and scope 2 emissions. Across Australia, Woolworths consumes 1% of all grid electricity. But Woollies’ scope 3 emissions are 14 times the size of their scope 1 and scope 2 emissions.

So, what are Woollie’s scope 3 emissions?

Woolworths undertook an assessment to understand where their scope 3 emissions are generated.

85% of their scope 3 emissions are in goods and services that the Woolworths group purchases. As you can see here, meat makes up 27%, followed by chilled products, drinks, pantry meals, snacksand poultry.

The Woolworths Group is committed to reducing scope 3 emissions by 19% by 2030.

The way Woolworths intends to achieve this emissions reduction is by working with its suppliers. They are approaching this systematically. Woolworths already has a good understanding of the areas in which their scope 3 carbon footprint is concentrated.

Many of Woolworths’ larger suppliers have already set their own emissions reduction targets, and 55 suppliers have trialed a new app that Woolworths provides called THESIS. In this app, suppliers can capture their emissions data. Woollies plans to roll out THESIS progressively to eventually cover all suppliers. Initially, THESIS will focus on measurement and data collection, but in future, emissions reduction will be expected.

If you are a supplier to a bigger corporate, it may be time to start thinking about your carbon emissions and a net zero plan for your operations.

 

100% Renewables are experts in helping organisations develop their net zero strategies and plans, and supporting the implementation and achievement of ambitious targets. If you need help to create your net zero transition strategy, please contact  Barbara or Patrick.

Feel free to use an excerpt of this blog on your own site, newsletter, blog, etc. Just send us a copy or link and include the following text at the end of the excerpt: “This content is reprinted from 100% Renewables Pty Ltd’s blog.

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