Companies are showing more ambition than investment in their efforts to cut greenhouse gas emissions and reach “net zero” climate goals, according to early results from an online carbon accounting tool created by the British procurement consulting firm Proxima.
The problem is particularly tough as companies wrestle with their “Scope 3” carbon emissions, which are typically linked to sprawling supply chains and account for about three-quarters of total organizational emissions on average, according to Proxima.
Despite their prominence, Scope 3 emissions are notably tricky to track, since they are created by a company’s suppliers and contractors through activities like transportation and distribution. In contrast, companies find it much simpler to account for their Scope 1 emissions—which are created directly by the firm’s own facilities or vehicles—and even Scope 2, created indirectly by the electricity or other energy that powers those buildings and trucks.
To tackle that challenge, Proxima created “The Scope 3 Maturity Benchmark” in collaboration with the Scope 3 Peer Group, a collective comprising over 2,000 procurement and sustainability professionals from some of the world’s largest businesses. Since it was launched in March, over 170 companies have contributed to the Benchmark by sharing their own experiences.
Participating companies are in the consumer products, pharmaceuticals, financial services, and retail sectors, and report combined revenues of over $2.7 trillion (equivalent to the world’s 8th largest economy by GDP). They are using the platform to chart their progress, define their next key actions, and provide a blueprint for other organizations wanting to follow suit.
Early results show that 47% of participating groups have set 2030 targets, but that ambition is not necessarily translating into investment to solve the problem. Proxima finds that there is no evidence of significant investment in terms of money or resources going into procurement teams, leaving chief procurement officers (CPOs) to think creatively and upskill their teams in the absence of funding for new resources and solutions. That raises the “very real risk of widescale failure” to hit targets, as organizational learning struggles to keep pace with corporate targets, Proxima said.
“We can see from the results that many of these organizations are going to miss their targets, they are not committing enough resources, they do not have detailed plans, and do not have the structure and support in place to deliver. Seeing businesses start the journey is positive, but more work needs to be done and fast or we risk reaching 2030 with achievements which do not reflect the effort,” Jamie Ganderton, Vice President at Proxima, said in a release.
