To achieve net-zero emissions, companies need to set ambitious science-based emissions reductions targets across their value chains. According to CDP, a company’s Scope 3 emissions are on average 11.4 times larger than its Scope 1 and 2 emissions, which is indeed difficult to target and reduce given the complexity of supply chain.
The challenge:
> How should companies prioritize suppliers for scope 3 engagement?
> What incentives can companies provide to a supplier to decarbonize?
> How can companies address emissions several tiers up the supply chain?
> How can companies enable suppliers to measure and report carbon reductions?
Case Study: Nike
Nike is addressing the climate change throughout extended value chain by collaborating with their suppliers to find better alternatives for production methods and energy sourcing.
A) Supplier Sustainability Council (SSC)
In 2020, Nike launched the Supplier Sustainability Council (SSC) with 11 of its footwear and apparel partners and aimed to achieve sustainability goals
Suppliers were selected based on the size of their impact: These eleven strategic suppliers represent approximately 50% of Nike's FY20 Footwear and Apparel, and Accessories finished goods volume.
Through the program, suppliers take on a leadership role around sustainability issues, benefiting the industry at large. They meets regularly to share learnings and progress. The SSC at-large is focused on broad sustainability issues, with climate change being the top concerns with a focus on rising energy costs, impact of increasing temperatures on working conditions, increasing intensity and frequency of extreme weather events, and government regulations and carbon taxes.
B) SUPPLIER CLIMATE ACTION PROGRAM (SCAP) (May 2020)
Supplier Climate Action Program (SCAP) was created with the help of trusted partners World Resources Institute (WRI), the leader in GHG emissions inventories, and CDP with the aim to help manufacturing partners within the SSC engage more assertively and urgently in the climate space.
SCAP is focused on development of long-term climate mitigation plans, while aligning with Nike’s Science-based Targets — set for 2030,which include reducing absolute GHG emissions in owned/operated by 65% and reduce emissions by 30% across the extended supply chain.
Providing suppliers with the management tools they need to set and achieve ambitious climate targets, and requires suppliers to conduct corporate GHG inventories, set Scope 1 & 2 emissions reductions in line with science, disclose through CDP.
Providing technical assistance to our suppliers to help set more ambitious climate goals.
SSC partners have committed to ambitious reductions across their entire Scope 1 & 2 emission footprint across their footwear and apparel businesses — a projected 42% cut in baseline emissions over 10 years being the pioneer in carbon emission reduction in the fashion industry.
Nike's MOVE TO ZERO
MOVE TO ZERO is Nike’s journey towards zero carbon and zero waste to help protect the future of sports.
Sustainable Materials and Innovation
Nike is aiming to choose materials wisely because they account for more than 70% of any product’s footprint. eg: fly-knit, recycled nylon, sustainable cotton, fly-leather etc.
*Nike Flyknit is a lightweight fabric precision-engineered with an average of 60% less waste than in traditional footwear upper manufacturing. Each shoe upper made from Flyknit contains 6-7 plastic bottle
ClimateXSports
Circularity
It will be worth noting, that following these footsteps, how other brands will respond with respect to change in strategies and material used over the years.
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