Our thinking

Chain reaction

21 June, 2024

It can be easy to get bogged down in the seemingly endless task of annual GHG inventory calculations and SBTi requirements. However, last week Kingfisher announced a vendor decarbonisation target that highlights the importance of value chain emissions thinking.

Last week Kingfisher, the international home improvement company that owns B&Q and Screwfix, announced its vendor decarbonisation plan, asking 550 of its biggest vendors (in terms of emissions) to set carbon reduction targets aligned with the SBTi. The top 100 suppliers must set SBTi-aligned targets and produce a roadmap to cut emissions by 2028, and the next 450 vendors by 2030. Kingfisher’s CEO, Thierry Garnier, emphasized the importance of this proactive approach to collaborating across the entire value chain, given that Scope 3 emissions constitute most of its carbon footprint, with vendor manufacturing accounting for about one-fifth. And Kingfisher aren’t the only one with programs like this, our friends at Nomad Foods, owner of Birds Eye, have committed to ensuring the top 75% of their suppliers by emissions develop SBTs by 2025, recognising scope 3 emissions account for over 90% of their footprint.

The impact of announcements such as these are two-fold. Through engaging with suppliers, Kingfisher and Nomad will reduce real world emissions that may initially appear out of their control. Moreover, they are signaling to other companies and industries that demands like this are coming, and the sooner suppliers start on their GHG inventory and target-setting journey, the better prepared they will be to meet the future demands of their customers.

This approach needs carrots and sticks to work. Kingfisher is offering support and training to vendors to help them on the road to net zero, and providing access to a data platform to help them monitor emissions and develop roadmaps for reduction. What will also be crucial is following through with suppliers, with consequences for non-compliance to guarantee they work towards (and achieve) their targets. And it goes without saying that this must come after a company has done the hard work of committing to its own reduction journey.

Where Kingfisher leads, other companies are sure to follow. Effective and meaningful supplier engagement on carbon is an area where many companies can produce a meaningful impact, and any B2B company that hasn’t already thought about its carbon reduction journey is likely to face similar demands from its customers. If you haven’t started, there’s no time like the present.

By Nia Vines