Supply Chain Talks | Schneider Electric
Value chains are hot topic. When you know that carbon emissions from the supply chain are on average 11 times higher than what is emitted directly 'on-site', you understand the buzz. We exchanged with BACA member and Supply Chain Leader Schneider Electric about how they engage their suppliers.
Can you tell us about your role at SE, and what energises you in this role?
As VP Sustainable Procurement, I oversee a range of programs with our suppliers to accelerate their sustainability agenda. This covers the full spectrum of ESG, not just decarbonisation. It includes environmental initiatives, as well social and human rights programs, and internal governance measures to assess ESG performance.
I often say that I have the best job on Earth. Knowing that the emissions in our supply chain are 33 times bigger than what we emit operationally, I can make a real difference. It’s not just our responsibility to drive sustainability, it’s our duty.
What triggered Schneider Electric to start engaging its suppliers in their decarbonisation trajectory?
Schneider Electric has been engaged in sustainability for over 20 years. We've implemented various programs, but soon realised that focusing solely on our own operations was insufficient due to the sheer scale of our supply chain emissions. Operations in our 150 factories, 80 distribution centers and hundreds of office buildings emit 33 times less than those generated through what we buy. If we're serious about decarbonising our supply chain, we simply must involve our suppliers.
That's why our supplier efforts followed soon after the onset of our sustainability journey. We started measuring our supplier’s ESG performance 12 years ago, using frameworks such a s ISO 26000 or Ecovadis. This was our first step in understanding our supply base's ESG status. These efforts were accelerated through various programs, including the award-winning Zero Carbon Project.
Can you shed some light on the Zero Carbon Project? What are its main pillars?
The program is designed to effectively involve our top suppliers in our sustainability journey. In 2021, we committed to reducing the operational emissions of our top 1000 suppliers by 50% by 2025. A bold engagement, but a key ingredient for real change.
There are three overlapping phases. A first one focuses on measuring suppliers' carbon emissions. The second phase is about ambition. We ask suppliers to set their own targets by 2025. This carries risks, of course, but it fosters greater involvement and ownership. In a third and crucial phase, we encourage suppliers to start acting without further delay. Those actions involve energy efficiency, electrification, and renewables. The fact that efficient energy consumption not only decarbonises, but also reduces costs, helps suppliers to garner support from colleagues who may not be fully convinced of the urgency of action.
How do you decide which suppliers to target?
We have 53,000 suppliers. When we launched the Zero Carbon Project, we initially targeted around 1000 of our strategic suppliers. However, after assessing their emissions using emission factors, we realized that occasionally swapping a strategic supplier for a non-strategic one with higher emissions was more impactful. This led us to shift our focus to the ‘top 1000 suppliers’, making up about 65% of all supplier emissions. That said, any supplier interested to join the program is welcome to do so. But we measure our progress based on those we've actively engaged with.