WEBVTT

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One number which blew my mind,
and you know,

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we found that 20—the upstream supply
chain emissions actually 21 times higher

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than the direct emissions.

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Pierre, Dexter, hello.
Thanks so much for joining me this year.

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We've just published a report,
"Turning Your Supply Chain into Climate

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Advantage."

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I'd love to hear from you and maybe
Pierre-François a little bit about what

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the report headlines are.

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So Diana, first, the report is, I think,
you know, very interesting collaborations.

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We share that with you and, you know,
more than 80,000 businesses, you know,

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climate emissions and climate practices.
And you know,

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you've been running a very interesting
insights.

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So, the focus of the report is, you know,
Scope 3 and supply chain Scope 3,

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and simply answering simple questions,
you know, what's the business case?

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Why, you know,
should we focus on the Scope 3,

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and how can we do it more effectively?

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And why Scope 3, you know,
because we think,

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or we find in the report,
it's actually the largest source of risk

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and managed emissions.
And the one number which blew my mind,

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and you know,
we found that 20—the upstream supply

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chain emissions actually 21 times higher
than the direct emissions.

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Great.

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And you've kind of highlighted the scale
of the impact.

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How are you seeing corporates manage that?

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What are—what is some of the feedback
that we're getting from the organizations?

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So what we found or what we found in the
data is, you know,

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if Scope 3 supply chain is 20 times
higher,

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you would expect that corporates have a,
you know, huge focus on that.

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It's actually the opposite.

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You know, we found that they are half,
you know,

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likely to set Scope 3 target than they
are setting their, you know,

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Scope 1 and Scope 2 targets.

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And what was, you know,
very interesting for me is what we found

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also is when you combine this with the
economic information,

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we found that the cost of those I think
13 gigatons of emissions will represent a

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liability of $500 billion.

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If it was, you know, using the current,
you know, carbon cost,

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which would translate looking at the
Global 500 in a, you know,

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EBIT reduction of 15 to 20 percent in the
next, you know, by 2030,

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I think.

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So not managed the right way and huge,
you know,

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huge cost and huge opportunity to,
you know, to manage.

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Yeah.

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And I think the other thing that stood
out to me on the back of that analysis

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was the fact that so much of the activity
that happens inside a corporate can

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actually be net positive from a cost
perspective.

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Because at $76 for cost of carbon,
many of the actions on the

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margin-abatement cost curve are actually
in the money.

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And we were seeing that about 50% of the
activities in the supply chain can have a

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three to six times ROI.

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So there's a real financial incentive for
companies to pursue carbon reduction

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through their supply chain.

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So that was quite encouraging.

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So I'm hoping the CFOs also take note,
not just the CSOs at our clients.

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Dexter,
I think the report this year started to

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get into how, right,
how do we reduce some of that footprint?

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I think there were five actions.
Maybe do you want to just take us through

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those?

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Absolutely.

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I loved the fact that it effectively
validated the last two decades of my work.

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So I was super excited to see the key
actions that we're really telling

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companies to focus on based on this data.

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So number one,
you need to engage your suppliers.

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This is critical.

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You need to actually ask the question of
the supply base. Number two,

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you need to measure the emissions.

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You need to make sure that you're
actually capturing the emissions.

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You understand how you're measuring and
pushing that out across the supply chain.

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And don't reinvent the wheel.

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So you've got to use established
standards to engage your suppliers or

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else they'll be responding to millions of
different questions.

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The third one is very much focused on
making sure that we can have a target in

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place to make sure that we're actually
measuring and managing these emissions

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across our supply chain.

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So a clear target that we communicate
clearly to our supply base.

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Finally,
you need a team to make this happen,

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otherwise you're not going to make it
happen at all.

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So if there's no one there,
no one's going to do the job.

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And finally, well, if you don't fund it,
it's not going to happen either.

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So you need to allocate the resources.

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But interestingly, what we found,
out of all of these initiatives,

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the most effective is asking the
question—actual supplier engagement.

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It means that a company is nine times
more likely to actually achieve their

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Scope 3 goals if they talk to their
supply base.

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So you can't achieve this in isolation.

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You've got to have the conversation.

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Thank you very much for your time today,
gentlemen.

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Thank you.

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Thank you.