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Weekly Short
26 August, 2022
The bulk of an organisation’s emissions often come from the supply chain, where much of the contribution may come from small supplies who may not have the capability, capacity or capital to establish robust carbon reduction efforts without support. So how should a large business go about tackling these indirect emissions?
One option is to provide financial support. Coca-Cola Europacific Partners (CCEP) have recently announced a finance programme for supporting sustainability transitions in its supply chain. The programme makes loans to suppliers to invest in carbon reduction efforts, and offers discounted interest rates to suppliers that meet specific KPIs. Since scope 3 emissions make up over 90% of the business’s total footprint, achieving decarbonisation among its suppliers is crucial to achieve their ambitious 2040 Net Zero target.
It’s incredibly challenging for smaller businesses to embark on a transition to sustainability, with financing being one of the biggest challenges they face, as well as know how and insight. But it will be impossible to reach a net zero world without SMEs going green. It’s encouraging to see large corporations taking initiative to tackle this issue, providing the tools to support collective action towards decarbonisation, sharing knowledge and capital to drive global change.
With others announcing similar initiatives, such as Tesco’s £2.5bn loan programme linked to progress against environmental targets, and Microsoft’s partnership with IFC to fund decarbonisation in their international tech supply chain, we hope this trend will continue to spread. It recognises the importance and interdependence of suppliers and customers, and is a great example of organisations using their influence and resource to effect change beyond their own P&L.
By Lucy Bell