There is no doubt that the UK public sector plays a critical role in setting society's sustainability agenda. Not only can central government departments implement and strengthen legislation to accelerate significant changes, but devolved local authorities have a huge opportunity to influence the behaviours of local businesses and citizens, connecting local efforts to national goals.
The challenge is sizeable and recent backtracking from corporate organisations recognises such, to an extent at least. Many ambitious targets were set and aligned with the Paris Agreement without a clear plan to achieve or a complete understanding of the trade-offs involved.
Reducing procured emissions, or Scope 3, will be essential for public sector organisations trying to achieve climate ambitions of becoming net zero by 2030, 2040, and beyond. After all, Scope 3 accounts for up to 80% of an organisation's total carbon emissions. However, supply chain emissions cannot be reduced without action from the supply base. Bringing suppliers on a collaborative journey will be a crucial element of success, and the sooner organisations start, the greater the positive impact on their emissions will be.
Even though the UK government’s Net Zero Strategy, its focus on combating climate change, and the introduction of PPN 06/21 have elevated the significance of reducing Scope 3 emissions, it’s still a real practical challenge for commercial functions across the public sector to tackle. A structured approach is required to:
- Ensure Scope 3 emissions data is well-understood and trackable to measure progress
- Benchmark the current approach to incorporating Scope 3 into procurement and decarbonisation, identifying gaps, opportunities, and recommendations
- Outline steps for improvement
- Bring in an expert, external perspective on current and upcoming procurement regulations
- Understand how you do / can engage suppliers
Many local authorities are benchmarking their current approach, exploring beyond PPN 06/21 by leveraging an expert, external, and objective perspective to understand the latest thinking and engage Leadership teams to make a change. Some key focus areas for benchmarking organisation’s current approach to Scope 3 are detailed below, along with insights derived from Proxima’s 2024 Scope 3 Maturity Benchmark Report.
- Process: Assess your fundamentals in creating change – how well do you measure emissions and build it into your policies and sourcing decisions? Proxima’s research found that even in leading organisations, Process remains a particularly challenging area to progress as learnings take time to permeate into sourcing practices
- People: Assess your carbon literacy level – how is training rolled out to your people and how well are net zero practices embedded across your organisation? The benchmark data revealed that while the majority are seeing an acceptance of the decarbonisation transition and training and development is progressing, talent acquisition and retention remains a challenge
- External engagement: Assess how well supplier engagement drives decarbonisation – to what level of external engagement do you deploy to deliver against your decarbonisation targets? How are you encouraging collaboration and innovation within your supply chain? Proxima’s research shows that industry collaboration is paving the way today, whilst supplier engagement and collaboration play catch up. Perhaps it is unsurprising when there is a notable lack of confidence in the net zero supplier management frameworks in place (or not).
- Data and technology: Assess how you measure, manage, and report on Scope 3 performance – how well is your data extracted, stored, managed, and utilised? How is technology integrated? As the saying goes, don’t let perfection get in the way of progress – the research shows organisations that are edging ahead are using the data they have to inform decisions, even if the confidence in current data quality is low. Accuracy can be improved along the way.
- Performance management: Assesses how well you measure and manage performance, support supplier performance, and reporting capability – the data shows that whilst progress is being made internally within organisations, particularly across reporting capability and internal performance management, there is still a way to go in extending this progress to the supply base. Perhaps this indicates a pattern of “getting your own house in order” first.
From experience, research, and our proximity to the market, some of the key practical recommendations for improvement we are seeing include:
- Engaging Leadership Teams to agree on a sustainable procurement approach – setting the commitment at the top helps set the tone
- Defining a Sustainable Procurement Strategy aligned to your key organisational priorities
- Developing a Sustainable Procurement Policy to ensure carbon reduction is embedded into procurement processes beyond Carbon Reduction Plans and alongside social value
- Understanding material contracts from top-emitting suppliers and approaches to tackle them
- Developing a Net Zero focussed Supplier Management Framework to engage suppliers on carbon consistently, targeting key suppliers first and measuring progress
- Agreeing appropriate and proportionate KPIs to enable effective progress reporting
The world has already heated up by approximately 1.1°C, and due to rising emissions, we are currently on track for at least 3°C warming this century. By achieving “net zero” emissions, we can limit this and avoid the worst consequences of climate change. Commercial functions are in a unique position to use their purchasing power to drive real change and reduce emissions for our planet and for our communities of the future.
Proxima's free Scope 3 Maturity Benchmark, developed collaboratively with the Scope 3 Peer Group, provides a starting point to not only make progress but also to start more conversations on the topic internally. To understand your organisational readiness to tackle Scope 3, you can complete the benchmark online: Driving Positive Change | Scope 3 Maturity Benchmark. Alternatively, download the Scope 3 Maturity Benchmark Report 2024.