SBTi Urges Companies to Engage Suppliers on Science-Based Targets at COP28

The Science Based Targets initiative launched a call to action at COP28, asking companies to drive a chain reaction of climate action by committing suppliers to set their own science-based targets. Supplier engagement targets are presented as the most effective mechanism for tackling Scope 3 emissions, which are 11.4 times larger than direct emissions on average.

SBTi's 2023 Supplier Engagement Guidance provides a structured process for companies to engage their suppliers and set formal supplier engagement targets — commitments to source a defined percentage of goods and services from suppliers with validated SBTi targets. AstraZeneca's target requires 95% of suppliers by spend covering purchased goods and capital goods, and 50% by spend for upstream transport and business travel, to set science-based targets by 2025. H&M Group has committed to reducing absolute Scope 3 emissions by 56% by 2030 using its supplier engagement programme.

The supply chain imperative is especially significant for Asian economies. An estimated 30% of global supply chains originate in China alone, and both Japan and China saw rapid growth in SBTi-validated targets — China recorded a 194% increase in validated companies in 2022. The shift from a cost-only focus to resilience and sustainability in global supply chains, accelerated by COVID-19 disruptions, creates conditions for supplier engagement programmes to gain traction. For Indian manufacturers integrated into multinational supply chains, pressure to set science-based targets is already building from European and US buyers.

The SBTi warned that failure to halve global emissions by 2030 and reach net zero by 2050 could reduce global economic output by 11% to 14% by mid-century, equivalent to as much as $23 trillion in annual losses. Maritime shipping, identified by the IEA as a fast-decarbonising sector, is targeted under SBTi's sector-specific guidance to reach net zero by 2040 rather than 2050. The initiative positioned supplier engagement as the multiplier effect most capable of scaling corporate climate ambition from individual companies to entire value chains.

Key figure — USD 23 trillion in potential annual global economic losses from failing to meet 1.5C targets