I’ve been catching up on the Supply Management website reports relating to the recent CIPS Sustainable Procurement event held at the Oval. They are only short summaries on the website, but you can get the general thrust of the arguments made by the presenters. Two reports of the event sessions in particular highlight a key issue around carbon and the approach organisations are taking to their “Scope 3” (supply and value chain related) emissions. I suspect the two speakers involved don’t fundamentally disagree about much, but you can see two different approaches emerging from their remarks.
The first session came from Mark Perera who of course is my collaborator on the Procurement with Purpose book and co-founder of our movement. He is also founder of Vizibl, the procurement software firm, although he has recently handed over day to day running of the business to the excellent Richard Hogg. Mark spoke at the Oval and his theme was about the need for organisations to “get on with it” – don’t wait until you have perfect supply chain emissions data before you start taking action, and certainly don’t let data be an excuse for inaction.
He said procurement teams run the risk of ‘greenwishing' by “waiting for the perfect data set”, but emissions won’t reduce just because we stare at the data for long enough. Instead, he urged procurement teams to take more immediate action on their and their suppliers’ carbon emissions. ”If you're not working collaboratively with your suppliers to actually tackle some of these key categories to transform, then you know in your heart of hearts that the business is going to miss its targets”. And as he regularly reminds me, we only have a few hundred weeks left to take serious action to keep within the 1.5C global heating target.
Then we have Normative. That firm provides “science-based carbon accounting software and tailored advice from net zero experts, enabling companies to reduce their carbon footprints”. The business started in 2014, has offices in Stockholm London and Copenhagen – it received 31 million Series B funding last year with some serious “sustainability investors” on the books.
The firm’s head of science and climate research, Alexander Schmidt, told the CIPS event that “around 60% of emissions are not captured in most companies' carbon calculation tools”. So firms are underestimating – often by a long way – the scale of Scope 3 emissions. Without accurate calculations and full disclosure, net-zero targets will be insufficient. So buyers need to have accurate and automated tools to assess their footprint – and you can’t do that with Excel spreadsheets.
Clearly, Schmidt was promoting the use of Normative – just as Perera was selling the benefits of Vizibl, a collaboration tool at its heart. But do you need to have great data before you can take useful action? Or can you take useful and productive steps even if you don’t have all the facts and figures to hand?
Well, I can see both sides of the argument, but I tend towards the Perera argument (and not just because of our relationship). I remember many years ago being told I couldn’t start procurement collaboration across the half a dozen or so different Dun and Bradstreet companies because “we don’t have the spend data”. And in those days, doing a spend analysis took literally months.
OK, I said, to the assembled procurement managers from each business. Is everybody spending money with BA? Yes. IBM? Yes. And Xerox? Yes. DHL? Yes. Right, let’s get what basic information we can together, go and speak to a few of those firms, tell them we want a better “group deal”, and see what they can do for us. And we’ll work on comparing specifications and getting better detailed data as we go.
There are missing links in the emissions discussion though, particularly questions around feasibility and prioritisation. For most firms, talking to some major suppliers will be a waste of time – as I’ve said before, Microsoft, Amazon, Ford or BA aren’t going to change their approach to anything, including emissions, for one customer unless you are literally in their global top 10 list. So I think we have more work to do in developing tools and approaches to help firms analyse where in their supplier base they can really help to make a difference. For most of us, that is not necessarily our largest or most strategic suppliers, as questions of supply chain power and supplier willingness to collaborate must be considered too.
But as we see record temperatures again in parts of Europe, Mark Perera is correct – we all need to be doing stuff, not just talking about it or collecting more and more data.