Engaging Suppliers in Sustainability Efforts

This is a summary of a BestPractice.Club discussion among members in overcoming the challenges within supplier collaboration whether for operational efficiency, innovation etc. but, in particular, for supply chain sustainability and scope 3 / net zero initiatives.

Participants delved into the topic of supply chain engagement and sustainability, focusing on the challenges and strategies for incentivizing suppliers to collaborate towards net zero and ESG commitments. The discussion emphasized the importance of engaging suppliers through storytelling and simplifying the dialogue to resonate with their interests and business goals. James Butcher highlighted the significance of framing the conversation around outcomes such as resource efficiency and reduced waste, rather than solely focusing on carbon reduction, to align with suppliers' interests and promote engagement. Participants also discussed the need to provide achievable goals, demystify complex processes, and offer support to suppliers on their sustainability journey.

Additionally, the conversation highlighted the value of recognizing and rewarding supplier efforts, as well as the importance of understanding the business risks and opportunities associated with sustainability. The participants explored practical approaches such as providing simple tools for calculating scope and sharing success stories to encourage suppliers to participate in sustainability initiatives. The discussion underscored the significance of fostering a collaborative and supportive environment to drive meaningful change across supply chains and achieve sustainability goals.

How can businesses incentivize and coach suppliers to progress towards net zero and sustainability goals?

Businesses can incentivize and coach suppliers to progress towards net zero and sustainability goals by taking a strategic and engaging approach. This involves framing the conversation around outcomes such as resource efficiency and reduced waste, rather than solely focusing on carbon reduction, to align with suppliers' interests and promote engagement. Providing achievable goals, demystifying complex processes, and offering support to suppliers on their sustainability journey are also crucial. Recognizing and rewarding supplier efforts, as well as understanding the business risks and opportunities associated with sustainability, can further incentivize suppliers.

Additionally, businesses can simplify the dialogue to resonate with suppliers' interests and business goals, and provide tangible support to facilitate meaningful collaboration and progress in the realm of sustainability and supply chain engagement. It's also important to communicate the benefits of sustainability in commercial terms, such as increased competitiveness, cost reduction, and increased resilience, to motivate suppliers to participate. Ultimately, fostering a collaborative and supportive environment is key to driving meaningful change across supply chains and achieving sustainability goals.

What are some effective strategies for engaging suppliers in the journey towards sustainability and resource efficiency?

Some effective strategies for engaging suppliers in the journey towards sustainability and resource efficiency include:

1. Framing the conversation around outcomes: Instead of focusing solely on reporting and data collection, emphasize the outcomes and benefits of sustainability efforts, such as increased competitiveness, cost reduction, and increased resilience. This can motivate suppliers to participate by demonstrating the tangible impact on their business.

2. Providing achievable goals: Offer suppliers clear and achievable goals to work towards, such as reducing energy use or transitioning to green energy. This can help suppliers see the practical steps they can take to contribute to sustainability efforts.

3. Demystifying complex processes: Simplify the dialogue and provide support to suppliers by demystifying complex sustainability concepts and processes. For example, providing simple tools for calculating scope and sharing success stories can encourage suppliers to participate in sustainability initiatives.

4. Recognizing and rewarding supplier efforts: Acknowledge and reward supplier efforts towards sustainability, such as providing certificates or recognition for their achievements. This can incentivize suppliers to continue their sustainability journey and foster a sense of agency and pride in their contributions.

5. Building capability and raising awareness: Work with suppliers to build their capability and raise awareness of sustainability strategies, such as measuring impact and understanding the implications of sustainability goals. This can help suppliers understand the importance of sustainability and resource efficiency within their own operations.

Full, anonymised transcript

Disclaimer: this transcript is AI-generated so please excuse any oddities, anomalies or errors...

JP Doggett

So we're assuming that people are kind of there in terms of established a baseline and we're really focusing on, OK, once you've got that baseline and the job is to then make progress towards your net zero or other ESG commitments, how you go about incentivizing and working with those suppliers to get them to collaborate, especially if you are not necessarily the biggest, the biggest customer, because if you're the biggest customer, then you've got more clout.

But that was the first part that I invite you just to to share your thoughts on please.

James Butcher

Thank you very much.

I'm pleased to meet everybody.

And so, JP says we met a while ago, I think actually on a, on a panel or something like that, it's probably inevitable.

James Butcher

The context for me, talking about this, I basically spent the last 10 years helping companies around supply chain engagement.

So I've just returned to consulting, but basically all of my expertise about this is trying to build change with suppliers.

It's about building capability with suppliers, so I wasn't going to talk about the kind of the specifics of you know, survey data collection, et cetera, but the very simple model that I used to try and frame all of this change, I'm assuming just from looking what's on those, but many of you know this, but I do like to just go when we're looking about supply chain, if you're in the world of manufacturing, as many are on here, then this startling statistic from PwC last year, which is 55% of GDP is at risk.

And I think that kind of segues into Part 2 a little bit.

But you know, why does supply chain matter?

It's not a reporting exercise.

It's unless we get ahead of it.

We have challenges if you're in a manufacturing space, a retail food, CPG 80 plus percent of your carbon, 97 plus of your natural capital is almost certainly in your supply chain.

And 99% of the complexity, which is why we have seasons like this talking about it.

So only going to say where, where, where people I think make the mistake.

So you've got to want your suppliers to do something.

We're starting from a position where they're inactive.

They've got, you know, limited motivation to help you with limited understanding of what to do and the mistake that I just saw so many times over the years was basically coming straight to right, we need to do this…hey supplier fill in this form…hey supplier use this new tool…hey supplier get whatever data might be right and fully enough.

I'm then sitting on calls like this being frustrated.

They're not getting the desired response etcetera.

And reality is that unless it resonates because suppliers don't do anything, people do things.

Suppliers are bricks and mortar, so you've got to get the person at the end of that email at the end of the phone to actually resonate with what you're trying to do.

And if you've not got that resonance, which is a word that people rarely talk about in this space, then it's difficult to start.

Actually, it's very difficult to sustain action.

And you get all the things that people talk about the slow response rate.

Poor, poor participation.

I did it, but there's.

But ultimately, there's no agency for change.

So yeah, bit bit of almost kind of, yeah.

What's the obvious opposite of that?

Well, setting an intention based on not reporting or I want you to do this.

But what success looks like.

So what's the outcome?

What I want to achieve now what's the output I want to achieve.

So where are we trying to go?

What does success look like and what does that outcome?

What, ultimately, what do you want from suppliers to achieve that?

So if you focus on outcomes rather than outputs, you can actually start looking at what is the motivation behind doing this right?

If people see you know reporting as the end in itself you are not going to get the participation you want particularly in the scenario we said where lots of your supplies you might not be their biggest customer.

It's hard enough when they are your biggest customer, so he's actually doing well.

What are we trying to do?

Well, we're going to do this because our product is going to be more competitive.

We're going to do this because we're not gonna lose these customers.

We're gonna do this because we're gonna take costs out of our operation or we're gonna increase resilience.

So ultimately, if you can get that resonance.

And agency, which is a belief that you can change.

So even in business, there's lots of people with whom we all have friends who are down the pub, down the bar, wherever, wherever it is.

You know, why should I bother recycling when China's building 2 new power stations a week?

Kind of thing.

And if you relate that to what suppliers are trying to do is ultimately, why, why?

Why is this what I'm going to do?

Going to make a difference and can I make a difference so that agency and resonance is all about how to communicate that whether it be supplier internal or customers?

This model applies just as well.

It's not mine.

It's derived from something from Sarah Flynn.

I've got the link here and clearly, but I say clearly, but anybody wants these slides, very happy to share afterwards the, but you get that higher participation cause people now have that agency with something and actually they've they've got a story to tell their colleagues, their associates of why we're doing this because it's good for the business in terms of positives or derisk thing, it's not just about reporting and it's not nebulous so.

Mindful we've only got an hour and you gave me a generous.

Give me 15 minutes, JP.

But in terms of the first point of the topic, that was it, I can go on to the risk side, but it's probably, you know, worth just pausing and talking about that if you're OK with that.

You're muted, JP.

JP Doggett

Yep, sorry about that.

Yeah, that's a good point to pause.

And anyone can jump in, but I thought I'd invite M to to reflect on what James has said first, because in your in, in your input, I think these were your kind of main questions about how to combine the prioritisation with the routine collaboration that you would do outside of net zero or alongside, I should say, net zero and sustainability.

So what are your thoughts on what James has suggested?

M

Interesting.

So we actually as a business have got a call next week about how we improve our supplier engagement.

So we do quite a lot at the moment, but it's very kind of commercial and I think the challenge we're at is we're looking at service level, all sorts of other KPIs that we've been pushing on for a long time and ESGN sustainability is starting to come into those conversations.

And I think what we're struggling with is how we then fit that into everything else.

I think I really like that, James said.

Was about storytelling, so I think we're not selling them a story at the moment, so this is not a good share.

We're not sharing a story at the moment.

We're kind of very much going along with this world.

This is what we need to do and I think that's where we're maybe getting a bit stuck.

So we are kind of saying we need you to fill out these reports that've been in place for a long time, etcetera, etcetera and we're getting all the information, but we're not making any kind of changes and they're probably very unallowed.

We haven't probably aligned very well our goals or what is a shared goal.

So we're kind of saying this is the information we want, this is what we're trying to do, but we're not kind of working with them on joint projects or if so, they're very small that focus on, say, paperwork or you know they're not gonna big enough to make the biggest impact.

So I wouldn't say we're in a great position to share.

They're the challenges.

I think we're kind of recognizing where we are at this point.

JP Doggett

M, I'd like to turn to V partly because it's been ages since I've spoken with you.

Uh, it's great to see you, but also because you are yours, you're kind of and a level where you're starting to look at that, that implementation.

So I just wondered whether or not you had any reflection in, particularly if you've, , if you've had any success.

I know you know from a huge company, so you kind of got that, that weight behind you with suppliers.

But how are you finding things in terms of that?

Lot supply can aberration, particularly on sustainability.

V

Yeah.

So I have to say that I'm just back in JP, you know, after the World Economic Forum.

Experience.

But what I can do is what I can say is from a general perspective, the sustainability part for G is very important to our pledge, saying that in 2030 we should be carbon neutral, including scope, three things and on scope wants to come true.

We are already progressing.

We have some lighthouses.

Sustainability lighthouse, so it's definitely in our strategy when it comes to suppliers.

Uh would say connectivity with.

With that, the first we are less we are progressing.

I would say in the past, which is lower, uh in a sense that the 1st.

I would say the first challenge is to know where we are with this country, with the supplier.

So that's probably to get the good data quality to measure.

The starting point is to measure and that's probably the first thing we are focused on for the moment.

It's improving the data quality we can have from them and share with them.

And then after that.

I think the second thing is that we want to uh, I would not say build capability, but at least raise awareness of what is our strategy in scope free.

And as you said, James, as we have multiple suppliers where we are not necessarily the most important because you know in pharma to SQL things you have a sort of very splitted uh suppliers and network is very splitted.

So yeah, we will focus on the main ones, but anyway we have to build the capability to measure, to understand, to see, to, to, to measure the impact, to understand it.

And then we will probably try to have a collaborative action for reduction.

But these two first steps, and especially the one of having good data to measure, is as far as the priority for the moment.

So it's not so much or for the moment it's got freeway in scope one and two, we already see you know very good things.

James Butcher

If.

And if I can respond to that, I think where you're at.

V.

Thank you.

Is that?

Yeah, I'm on my slide.

It said 99% of complexity in the supply chain scope one and two is clearly so much easier because it's in your control.

V

Yeah.

James Butcher

Yeah.

V

Yeah, sorry.

James Butcher

And the mistake that again I've seen is again when you're starting this dialogue and the storytelling, you've got to start the story at a place that your suppliers will understand.

So what happens is it is again.

A common mistake will go right and now I need to go and start asking my suppliers about, you know, life cycle analysis or detailed emissions or what's going on in certain products etcetera.

And a lot of them have gotten that they can't spell ELCA.

They have no idea what their own scope is.

One or two are actually having a capability questionnaire, which is literally, you know, do you have a policy?

Do you know your own scope?

One, do you know your own Scope two that allows you to decide where the supplies are in the journey I think is really important because it starts that dialogue.

If you send out something very detailed, I don't know what mail this experience was but you sent it very detailed.

Sometimes you get nothing back, but you don't know why.

So actually sending things that they can respond to.

So taking the you say in the healthcare GSK, they did it, they shared a case study where they went to their top 400 suppliers.

So they're probably very large suppliers and of those top 100 suppliers, the third had no idea what they were talking about when he came to scope one, scope two, et cetera.

So it's really dangerous to assume and really important to meet suppliers where they are.

So you start telling the story for the right age group kind of thing to bring on that journey.

V

Yeah, I agree.

JP Doggett

Thanks for that James and V, please anyone.

If you've got any reflections, you're welcome to join in.

Put your hand up by the virtual hand or real hand, especially if you've got any kind of, you know, best practice in terms of things that are working.

James please.

J

I have one.

My responsibility is around stroke three category 4, so transport and distribution emissions.

I think what we found difficult is that we work with maybe 20 or 30 different transport suppliers across EMEA, which is the remit I'm looking at,

And we've got to this year about 92% coverage of our sales in terms of emissions reporting.

But the difference in the stuff you get back from different suppliers is wildly different and we have some suppliers and I'd call them Q and A. Those kinds of best practices send back a very detailed report with a cover sheet.

They detailed their methodologies and this time the other, and they even called out where they didn't have data and but some other suppliers.

You asked them for CO2 and we had this agreed last year and after I know bashing over the head with a shovel for the past two months that they finally sent through an email that just said your carbon emissions is X and it's like, well, there's it doesn't tell you what it's for, doesn't give you the methodology.

It doesn't tell you how they calculated it.

There's no data there, it's just a figure in an email but I think that's the problem.

Well, I think we're having it firstly, there's so many different suppliers and they all are different levels.

It's not 1 consistent story.

You need to tell it it's.

The story is different for every single different supply in terms of where they're starting from.

Meaning that every time you speak to someone, you've gotta.

You've got you.

There's not just.

That's there's one story to tell, and maybe it's the same story, but there's, you know, multiple different starting points.

You need to begin from and so it makes sense to them.

James Butcher

I certainly do that.

Echoes the point I was saying James was understanding where they are.

I was working with the manufacturer a couple of years ago.

Who specifically has the category four data?

I'm facing a similar challenge.

I have to say they had nowhere near 92% coverage, but they were talking to, I think, largely smaller freight handling companies who therefore were less experienced.

They actually reduced the questionnaire to those who are starting to get data.

They basically reduced it to very simple questionnaire which was so spend based analysis which we probably all know on this call is the least accurate for number of reasons, but was literally let's start from of the money I spent with you what percentage it fell into these categories so was it yeah, motorbike Courier, whatever it might be.

Yeah.

And we've got the standard European emission factors for each of those we're gonna use to multiply.

Have you got anything better?

Yeah.

And what it did was it actually for some of those files you haven't got a clue.

It effectively taught them how to get a first base of what they were doing, but started the conversation and I think that and that might be doing a disservice to where you are.

It sounds like you're much further down the journey, but something like that, where these people who've just sent your carbon number, and therefore who knows how they made it up.

It gives you a common dialogue, but actually those who haven't got a clue where to start, it's leading on the journey.

So I use it not necessarily as a.

There's a solution, although you know, maybe something in there, but it is that needs to meet people where they are because the moment you've done that you can have a dialogue that says clearly we all know we spend worse.

So now have you got the day to do the same by miles?

They've not got the data, they don't know how many miles are travelling, et cetera.

Depends on what methodology you're using within the protocols, but getting them started is the most important thing, and that will pay back when they're going.

Actually you are the customer that helped them on that journey.

I'm because sometimes your equivalent is in that business that they're sustainability manager is just as frustrated.

Banging my head against the wall trying to get their company to do something extra and you're giving something they can take back to their business going.

Look, we've done this.

Yeah, but I know we're in the lower quartile and not very good.

What can we do to improve so it's all?

Again, it all comes back to that dialogue dialogue, not monologue.

J

And actually, a lot of the better suppliers have kind of teased and said, " yeah, please don't share this report.

In its entirety and let us know what you do with this data.

So what I'd like to do is to kind of share that report with, you know, some of the, the other transport suppliers to say, look, this is an example of best practice and this is the sort of data that we're looking to try and get from you.

But we're for obvious reasons.

That's a competitive advantage for the other transport supplies.

JP Doggett

Thanks for that both.

L

Hi everyone.

Just a great one for me, James.

And I think that we're just about to start putting our questionnaire out to suppliers and we are a bit worried about what the responses we're gonna get back because obviously it's the first time we've been building this now for about 6 to 12 months.

We don't know if it's over complicated.

We don't know how the supply is going to react, but what you've said on CNN now capable of their capability is to start with.

I think that's gonna make such a difference.

And I think before we start sending the questionnaires out, I think we do an analysis first and send a quick typability test out to them.

Quick fire questions and see if we get what we get back.

James Butcher

Yeah, I mean and it's probably taking the questionnaire that you've got.

If you think about the way you would if you had a conditional questionnaire.

So there's a very first question.

Can you spell scope free, right?

L

Yeah.

James Butcher

If not, the rest of those questions should not bother asking you that kind of thing.

L

Yeah.

James Butcher

So the clues as to what you need to ask are probably in the questionnaire, so it can still be the same one.

Just make it conditional so they don't get all of the stuff that they don't, that they're likely to be able to answer and therefore just stops them pressing the button on a response.

L

Yeah.

OK.

James Butcher

The other big guide when you're doing some of the first questionnaires is structure it so that and there's, there's that they don't.

They don't feel like going to penalise, to be honest.

So one of the very first questions on the ones we do is actually pay.

I'm brand, you know, I don't.

I'm Albertson's retailer.

I've made this pledge.

Are you aware of this pledge?

Because if you don't actually know where I'm coming from, that's the first part of the dialogue that's broken.

James Butcher

And yeah, the answers will be well, yes.

I've been aware for ages through the press or through my day-to-day contact or whatever, or the kind of the worst answer is, well, I'm now aware because I've read this email right?

L

Yeah.

James Butcher

But they always feel like they're saying yes, whereas I learned the hard way it is.

We used to actually have one of the questions was no, I didn't do anything about this.

No one ever clicked that button, so it's trying to get the openness, or if you're asking where they are in terms of, have they got a carbon reduction policy, et cetera.

James Butcher

The Carbon Trust has got a standard set of five questions that we've used as a framework.

We just basically start from where we are working on it.

We've got nothing formal to say.

Yes, we've got, you know SBT, I etcetera.

But again, it's about where they are and it's nothing punitive.

So it's looking at, you know, just trying to look it through your eyes.

Would I want to be honest with this back to my customer?

And I think if you can do that, then at least you'll get a response.

You might have liked the response, but at least you know where you are.

L

Yeah.

Thank you.

JP Doggett

Thanks L.

Anyone else want to come in?

Was thinking of questions you might wanna ask.

I'm actually gonna ask C if that's OK, C.

I'm glad you've been able to join.

JP Doggett

I think the last we spoke on this topic about this time last year, I think and from recollection you're at that stage where you were gathering data and I think you were using an external party to fill in the gaps and that data.

So I'll be interested to see what your experience has been and what's happened in the last year, if you don't mind sharing that Sedrick.

C

Yes.

So we've actually, it was a really long journey.

I think we will send the questionnaire.

I think I wanna say 18 months ago.

And I think as you said, James, we had a variety of different answers and quality answers.

C

So with some.

Ohh years being very detailed in the plan and how they calculate the data and some with very basic information.

We'll still chase some of them 18 months on, let's be honest and but as well as struggling a little bit with our partner because.

The tool that we've been using, does it help us really chew, put an action plan together.

So it's a great reporting tool.

It will calculate your emissions based on the mileage and the type of transport, etcetera. But

It's very complex.

It's not really user friendly and it's hard for us to say, hey, where should we focus now like we all have, dates are great, but what do we do now to kind of make an impact?

So we actually rethinking a little bit or approach with that supplier and see if we should switch to a more.

Uh to different reporting tools to help us that doing this we as well we have a bit of a.

So we have a global team now that's developed on our global, the global impacts, which covers a lot of different some of our corporate pledges.

One is being greedy.

Everyday greenhouse gas emissions reductions.

But it's the wetter usage.

Uh, the original 2 vector culture and all of the all the different aspects.

And they develop reporting as well of I greenhouse gas emissions using averages of our businesses.

And So what we are finding as well is we, we've started in part of our business in Europe and Australia trying to, if you like, have a data bottom up and we have as well that top line reports in corporate reporting that goes top down and we don't really necessarily always find the same results.

So this is well that work to try to.

I've only one reporting across the board and make sure that that reporting is useful for us to take action.

It's just not just to report a member at the end of the year, but being able to kind of track progress.

Uh, and being useful puts targets on it.

So I think we have that stage of a should we relook at how we report the numbers?

Second, should we set targets, each of our regions should have targets on greenhouse gas emissions reductions, and we can track our progress against that target.

So I think there's a big process with our external partners.

There's a bit of process internally for us to structure our approach and make sure we have targets and we track towards our targets before we can actually make progress on our commitments.

So it's still a little bit.

James Butcher

A.

It was really interesting.

So when you talk about the top down reporting and the bottom up, there's that I know a number of companies now who are not trying to join those two things you've said that you know you that's a problem.

I've actually said, look, we're going to report with the top down way because we have to be able to report, we can take a standard methodology, but we know it's all averages, right.

And we're gonna do some bottom up stuff where we're going to get very specific details in specific parts of the business that allow us to improve and we're going to stop wearing ourselves out trying to join the two together, right because whilst ever you're dealing in averages, it's really hard to get into the specifics, but it's impossible to get the all those specifics across all of your products and all your sites and all of your business.

So clearly intellectually, if you can make them all the same, that's got to be better, right?

But actually it's really hard to make them one in the same given the lack of standards and the lack of data and the lack of engagement.

So if you can do it, great.

But again, one of my councillors would n't change it because it's an intellectual thing.

There's a reporting side of the business and there's a driving change side of the business and they don't have to be the same thing.

Quite controversial.

I found that sometimes, but it's for me it's my background as an engineer and I just like it's you're not gonna get any of these detailed processes better whilst every dealing with averages so.

JP Doggett

Yeah.

Thanks for that, C and and thanks James.

It reminds me, actually, of we had a session on this.

I can't remember when, but the key thing I remember from that was that every five weeks equates to 1% of a decade.

And I think, V, you just said that Johnson and Johnson have got a target of 2030.

We're already past the first month of 2024, so the question is in terms of the data and the reporting, how good is it before you can actually really start making progress towards that target?

And I guess that's primarily for James, but anyone else as well?

James Butcher

And I mean.

I think in some ways I probably like to go on to the I got a couple more slides.

It kind of went on to Question 2, but I saw there's a couple of questions.

First, I don't know if you can answer those and then I'll 'cause I think it's, again, it's about changing the dialogue and I think it is a danger of a conversation about net zero is the risk.

So, but I think

JP Doggett

Yeah, yeah.

P first.

P

Yeah, I am not so much of a question mate, but maybe to share what we are doing transportation wise to try to start.

So our target for us is half emissions by 2030, zero and net 0 by 2050 fifty.

So our transportation model warehousing to customers works with a four PL provider called 3 and what they've done which I found very, very useful.

And I thought it's worth sitting with all of you.

Is that they're kind of educating slash forcing all of the carriers that work for them to use an app.

So when they come in to collect something, the car needs to confirm on the app that they collected the app, track them live and we can see the track live as it goes to the destination.

And then they need to check to confirm when they delivered.

So the data from this app plus the integration between our systems which gives them track feel and the identification of the track which gives them what kind of truck it is and what kind of fuel they use gives us a very, very accurate picture on transportation on the actual emissions for that bit.

Having said that, not all of the truck drivers are used to this technology yet, so we have about 80% compliance.

So and and here comes the question and James or JP, how can we as a business support for PPL to educate them the wider business, the carriers on why this is important and why tracking and not only benefits are my business, but it also benefits them.

James Butcher

How's it going to benefit them?

P

Yes, because in order to convince the 20% that are not compliant using the app, they don't get the benefits of this year 2 net.

How can we help them make this a success story for them?

If you can share something similar that you've experienced in the past, what's the best way to get there? Buying.

James Butcher

But I think I mean that the answer is actually answering that question of why is it better for them?

And I think but that needs to be.

Why is it better for them in commercial terms if you try and do it from a, he's gonna be sustainability better and you're gonna feel good about yourselves and whatever.

Then you're not gonna get the engagement because I don't care.

P

We tried but it didn't work.

James Butcher

So yeah, the reality is, you know, it's trying to find a success story.

That said, look, you know we've, we know some people have been using this app.

It's helped them identify things like, you know, people sitting with engines idling.

When traffic managers, when they're burning the waiting for example, it's allowed them to reduce their emissions, but actually for transport emissions almost directly equates to fuel.

Yeah.

So clearly, if you can reduce your if you can use this app to reduce your emissions by 10%, you probably reduce your fuel bill type Ben 10%.

So actually you're missing out on a 10% cost reduction.

So it's telling them a story that matters to them, not in the store.

It matters to you.

Yeah.

And I think that's true for so many, so many of the things we're trying to do.

And don't know what and if it's OK.

James, you had your hand up as well, do we?

J

That I don't carry on.

James Butcher

This wall is going , it's actually this.

This is where I was talking about next to some extent, which is there's lots and lots of talk about carbon neutral or net zero or zero carbon or whatever, and even those you get people who can't necessarily agree what they mean by the using the same words, right?

, you know, he's offsetting.

Good.

He's offsetting bad.

Well, it depends whether you have no choice or whether a company is selling offsets.

That's all.

Yeah, there's a lot of confusion.

A report in January said the single biggest risk this decade to hitting our targets is confusion.

So that's adding on that earlier diagram.

All this talk about, do you know you go one scope two.

If people are knotting the conversation, it's like being dropped into a country in a foreign language and being expected to join the conversation.

So actually and for me Net 0 is really simple.

It's 110% green energy and zero waste.

Yeah.

If you do those two things right, you're basically getting there, right?

So if you try to have a conversation with suppliers about wanting to be carbon neutral, that's really hard to engage.

If you try another conversation about we want to reduce energy or we want to reduce waste or we want green energy, they're all of the building blocks to net zero, but they are things that people can get behind.

And when you break it at that level, so if we say we will, we're trying to reduce, we're trying to reduce wasted energy to our last example.

We're trying to reduce wasted energy and one place we know there's reduced waste energy is fuel being burned in lorries sat with their engine idling because they can't be bothered.

And if you mean construction, so is construction machinery.

about 1/3 of the energy waste is literally diggers and things sitting there with the engines running doing nothing right?

But as an industry, they're doing things where they're literally now.

Yeah, putting sensors under the seats.

So if the person gets out, it turns off, right, rather than leaving it on because it's just convenient forms, not get it started, but the dialogue is all about very specific things on the right, and I think that fits with what Mel is for about the storytelling.

It's much easier to tell a story about something on the right rather than something on the left.

I think when you're building your questionnaire, L, and that communication trying to frame the sections about things like on the right rather than on the left, you'll get a better response.

And I think you're, you know, both and yourself on the transport distribution.

It's engaging that 10% to not only engage in a dialogue that will resonate with them.

There also has to clearly come the stick at some points, which is, and if you're not, you know you're not gonna get on this journey with us.

We're not gonna be buying from you, but there are not enough green suppliers to go around.

We've got to try and help our grey suppliers get green and therefore do the best to give them the hand up and build the capability before we pull up that drawbridge.

JP Doggett

Nice change.

That's what really, really makes a lot of sense in the way I explain. That is now a good moment to segue into Part 2.

Do you think?

James Butcher

Yeah, just.

JP, I think it's things on the one sticking with the same slide, really some of those things on the right hand side, so the.

When we're talking about, we say we're trying to engage people and the whole just the net zero base and the and the the dialogue them something that which is basically carbon tunnel vision.

If anyone heard that language was so focused on the carbon discussion, we ignore other things.

, actually, if someone's not engaged with that because they don't, they don't have that agency, they don't think they're gonna make a big enough difference or they're not.

That could be agencies with their own business or in the larger global landscape.

But actually if you want to have a conversation about something like.

Fe certification being a target compared to deforestation, so most people familiar with it have got new deforestation legislation coming in across Europe.

So basically, yeah, it'll vary by product, but over the next few years, there's lots of products that you simply will not be able to sell.

If you cannot prove that they did not contribute to deforestation.

That is a clear business risk to anybody who's in those areas of related commodities, right?

So it's not just wood, it's coffee, it's beef.

It's things that are seen to contribute to this.

It's derived from products.

It's leather. It's furniture.

Lots of those things are going to be impacted by that legislation and my opinion, good legislation, long overdue.

Clearly, if I can stop deforestation, actually have more, more regenerative forestry, then I will stop the issues related to carbon and actually aid the issues, aid the benefits of carbon sequestration with all of the what's going on.

So it is a carbon debate as well as biodiversity, but actually, if we focus specifically on carbon reduction, we run the risk that we don't understand, those are the risks to our business and those risks are I just literally, am I going to be able to buy the commodities I need anymore because there's going to be a a race for scarce commodities because somebody's not enough certified wood, leather, et cetera to go around.

James Butcher

, there's going to be price pressure on all of those things because it is going to become a hard commodity.

So I think in answer to the question which is the focus on zero risk, I think it is because I think people are starting to get blinkered against some of the other issues, which ironically all roll up to contribute under or nearly all roll up to actually contribute to decarbonization.

Hence talking about some of the things, obviously just a few examples, but some of the things on the right hand side of the slide.

That makes sense.

I got some nodding and some back paces.

So I mean just just unless anyone has specific questions.

I mean when I qualified as an engineer some 30 odd years ago, we didn't talk about it.

Sustainability is such. We talked about resource efficiency.

It was.

How do I avoid waste?

How do I stop, you know, optimally use things and therefore think about this.

So in a sustainability context, it's using our limited resources.

The most popular successful way is circularity.

Whatever it might be, we have finite resources.

So actually, if we can engage our own teams and our suppliers in a conversation about resource efficiency, something's almost dropped out of the language.

Interestingly, in my time in business, the resource efficiency is, you know, avoiding waste everywhere.

It's avoiding waste going back to the example of, you know, 10% of fuel being wasted as there are vehicles not moving, the construction that they're not wasting, single use plastics, whatever it might be.

But I think the risks and opportunities are, in my humble opinion, being blinkered against cable television.

C

I agree, I agree, and I think it's something as well.

That's what I'm trying to use more and even internally to focus the team on sustainability is business risk, right?

You mentioned that we quickly just now realised that there's a risk to the business of not acting right.

It's not only you're gonna use your resource more efficiently, but if you don't do this, you're gonna.

You know you're gonna be against the new legislation, so we're coming to force, which may impact the viability of your business.

So I think what we have kind of a risk is an opportunity for him where we do monitor all of these aspects and usually they look very well with this sustainability agenda because we'll say hey, if we don't do it, we're gonna, we're gonna suffer here.

So we're going to lose business here.

So we should be doing this at least and and you're right, your bottom line would be improved if you explain zed, because that's gonna you're gonna use your resources more efficiently.

So I agree with both.

I think they both work really well.

Very well together.

James Butcher

Thank you.

JP Doggett

Yeah.

Thanks, James.

I mean on, on reflecting on that, you know when we when we have these discussions, it's quite often felt as if there's what you normally do for the business in terms of profit orientated activities and how supply collaboration can help with that in terms of making sure things turn up and went on time and in the way they're supposed to and everything else.

And then the net zero sustainability side is almost sometimes perceived as OK.

This is something else that we have to kind of nod towards as well.

Now we have to do that as well as our profit generating activities.

You know, we have to take these extra boxes, but the way you're framing that within the kind of resource efficiency strikes me as a way of being able to actually kind of marry those two together in a simple way.

Because ultimately, if you're using your resources efficiently then surely that's gonna be right for your bottom line as well.

But what I think doesn't really matter, so I wanted to talk.

Ask the mayor.

Listen to come back because I think that was the sort of key point that you had in terms of knowing how you married the two.

So does that make sense to you, M?

And in that kind of reframing as James has suggested.

M

Yeah, it does.

And I think actually listening to all of the story discussions is really helpful.

It's really making me think about what we actually do, how we give a different message to suppliers like, yeah, it's a useful thank you.

JP Doggett

Good.

OK.

Well, just keep them one on the clock.

We're into the last 10 minutes or so, so it's a final opportunity to reflect on questions of James or indeed of each other.

If you've heard something that somebody said that takes your interest, then speak now or forever hold your tongue and listen to the next session.

E

JP if it may, I'm listening because I am.

JP Doggett

Please.

E

I'm going to be quite honest and say my ESG input isn't isn't great, but it needs to be.

But what I have done in terms of one of influence suppliers, so one of own supply based likes of Tesco and and John Lewis, so sizable chunks of of supplier base, I completely agree with James, you've gotta give them the goal to be able to get to and equally I think I completely understand why a questionnaire given that questionnaire to the supplier base may actually make it harder to get to where you want to because they just don't know where they are.

So you had the problem actually become worse, but I'm not James.

I don't if you if if you do this and isn't interested in in, in how you help to or how you doing, how you'd advise to coach them to get to that place because some of them, as you say, they've got a clue about this, then those even gonna be worse than mine.

How do you get them to go on that journey when they haven't thought about it?

They haven't got any resources that they can plan to put into it.

How do you get them to walk that journey?

Beyond that, look, there's a prize at the end of this and I.

James Butcher

Post and and well, I think so it's it's great question if you just.

So it's got to start with the story and why this is positive.

So again, if you are just gonna go back a slide and still share, but you know if you go back and go, we're all for carbon zero and they just don't understand, you can really struggle, right?

It's what we want to look at.

We look across our supply base as to how we can collectively reduce energy.

Let's just take that particular one.

We reduce engine, go to green energy because that helps us all save money.

Now as a result of that, can you just answer this really simple thing?

Do you know your own scope?

One and do your own.

Your own scope 2 for example, right?

And it could be as simple as that, right?

It only takes 1 second to answer and it's actually not particularly difficult to answer, because if you ask them for their scope, one and scope to, they've got to go and get somebody to prove it.

Is it confidential or whatever?

Have they done it or not?

They're more likely to answer correctly and do questionnaires in that way.

When I was a supply pilot, we would consistently get a high 90% response rate.

So it's all about making it easy.

The reality is they're taking those over.

I mean, there was a manufacturing company.

They were hoping that they'd actually have about 1/3 their suppliers on the journey, a third so third well on the journey, third side and the third not starting was where they kind of expected because they read other ones.

They actually have that the best part of 85% of their supplies haven't got a clue and they basically wrote the next thing we're gonna do is we're going to do a very simple here's how to calculate your scope too, because it is really, really easy.

Right.

And demystify it and give something to them.

Right.

And because you've given something to them, they're now on the.

So ultimately it's like this is your scope too, because if you now share that in your business, you'll get pilled to look at your energy use for certainly different lenses, right?

And ultimately, the chance of the sustainability person at that supplier being able to have a conversation with their own team, even if that's sustainability person, happens to be the FDA or the HR.

Whoever has picked up the mantle, right?

So you're giving a little bit.

One of my biggest bugbears is companies who ask all of these things about their suppliers, but then also say that you now need to pay to use this tool to give me the data I need, et cetera. Right.

So you've got to give a little first, right?

And that taking that one very simple example, it would be doing something like that.

It would be saying we want to share this bit of our own carbon policy thing would be useful, right?

Giving them a given debate, and if you could help give somebody in that supplier organisation a success.

, let me just jump into context a little bit, but we did a project years ago with Walmart, went out again when I had my supply pilot had time, it was about decarbonization.

I didn't know what scope through was at the time.

It wasn't.

He wasn't bundled around his 10 years, 10 years ago, but he was actually asking suppliers about where they could reduce energy, like their using compressed air in factories.

It's so inefficient nowadays compared to alternatives, because 90% of the energy just disappears in leaks, right?

So we were doing that kind of education and one of the most powerful things we did was if a supplier shared a case study of what they've done, they've basically got a certificate from Walmart.

It's just an electronic one, just automatically generated and sent back and gone.

Thank you.

And here's a certificate for doing what you did right.

And the reason is one of the most powerful is people going.

I could put that on the wall and then talk to my own colleagues about it.

Look, we've just been recognised by Walmart or fill in the blank we've just been recognised by John Lewis, etcetera. We are making it.

We are making a difference.

I've now got agency.

What can we do next?

So how can you get them started with achievable goals?

So there are a couple of quite different examples there, but the principle is still the same I believe.

E

Makes sense.

Thank you.

Thanks James.

JP Doggett

Over one more of anyone's got one.

No, I don't.

Looking forward to a cup of tea?

I think so.

Listen, thanks everybody for joining.

I think it's a good time to park there.

Thanks especially to James, I found that really, really interesting.

It's really built on some of the stuff that we've done before.

So thanks again very much for doing that.

I will from the three various AI note takers I've got on the go.

Hopefully get a decent set of notes out of this and share that with you.

Won't be today, hopefully tomorrow, and I'll also copy you guys in so that if there's a conversation and you wanna have offline with somebody that's been on the call then that's an easy way to to pick up that thread.

But thanks again everyone for joining and thanks particularly to James, really, really fascinating.

Thank you very much.

James Butcher

Really appreciate the opportunity.

Thanks everybody.

And yeah, if there's anything in here that you want in the slides or whatever, just come through.

JP, anything I can share? Any better?

I no longer have an axe to grind now so I'm literally just trying to share the best practices and help us make a difference.

So yeah, anything I can do would appreciate the opportunity.

L

And thanks James.

JP Doggett

Awesome.

Thank you guys.

Have a good afternoon.