CDP and SBTi are two popular frameworks used by organizations to manage and report on their climate disclosures. The CDP focuses on driving sustainable economies by encouraging companies to disclose and manage their environmental impacts, while the SBTi aims to reduce emissions by setting science-based targets for companies. Both frameworks require companies to evaluate their value chain and identify significant scope 3 emissions, and to establish reduction targets. This guide will provide an overview of the CDP and SBTi frameworks on the specific aspect of supply chain management.

Initial step: Estimate scope 3

  1. Value chain mapping.
  2. Scope 3 screening:
    1. Initial emissions estimate across scope 3 categories
    2. Decide which categories are most significant (see table 1 below)
    3. Identify which GHG estimation method and what are the data inputs for each significant categories
  3. Refine and complete a full scope 3 greenhouse gas (GHG) inventory for the significant categories, following the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard - This can be done using Vert
  4. Finalize scope 3 GHG inventory.
  5. Set the baseline year for reduction targets.

These steps need to be repeated every year, with a continuous improvement in data quality.

Table 1: Criteria for identifying relevant scope 3 activities. From: SBTi, ENGAGING SUPPLY CHAINS ON THE DECARBONIZATION JOURNEY

Table 1: Criteria for identifying relevant scope 3 activities. From: SBTi, ENGAGING SUPPLY CHAINS ON THE DECARBONIZATION JOURNEY

CDP

In 2022 the CDP present the new Supplier Engagement Rating, which explain the requirements:

  1. Report on Scope 3 emissions:
    1. “a company can only achieve full points for ‘Purchased Goods and Services’ if the category is reported as ‘Relevant, calculated’ and both ‘Metric tonnes CO2e’and ‘Methodology’ are completed.” - This can be done using Vert
    2. “Emissions verification” – Vert output includes all relevant information (emission factors etc.) which allows to run verification on the results
  2. Supplier Engagement
    1. Points are awarded for reporting the number of suppliers that your company engages with and for reporting the proportion of your total spend or Scope 3 emissions that the suppliers represent - This can be done using Vert
    2. Point for innovation & collaboration with suppliers
  3. Individual performance and integration into business strategy
    1. Full points are awarded for reporting monetary rewards and partial points are awarded for reporting other benefits related to benefits for the management of climate change issues (both for buyer's procurement manager, and suppliers)
    2. Full points are awarded for developing a transition plan within the next two years and already having a transition plan that aligns with a 1.5oC world.

SBTI

The SBTi aims to reduce emissions by half by 2030 and achieve net-zero emissions by 2050. While it may be relatively easy to achieve these goals for Scope 1 (direct) and Scope 2 (energy consumption) emissions, what about Scope 3 emissions?

Since for most companies, supply chain-related emissions will represent a substantial portion of their scope 3 emissions: Category 1 - Purchased Goods and Services, Category 2 - Capital Goods, and Category 4 - Upstream Transportation and Distribution. Companies are expected to focus and set targets related to their supply chain to meet SBTi Criteria.

In Jun 2023 the SBTI published a new **Supplier Engagement Guidance.**