The client, a large buyer of carbon-intensive goods and services, is at the forefront of decarbonization efforts. Forging a new path, they are pursuing a critical role that will influence market actors across the supply chain to set more ambitious net-zero targets.
In need of an in-depth assessment that would identify reduction opportunities and transitional risks to mitigate the environmental impacts of Scope 3 emissions, they took full advantage of CGI’s ESG and sustainability multi-sectoral experience, as well as expertise and talent in change management, sustainable procurement and operational excellence.
With the effects of climate change, companies and providers are moving to better account for their roles in contributing to greenhouse gas (GHG) emissions. Government mandates, investors and internal environmental, social and governance (ESG) policies are increasing pressure to move quickly and decisively to improve the ecological footprint. In the case of large infrastructure owners, the impact of a robust environmental policy can have a significant ongoing positive effect across the supply chain and the larger community.
The challenge – Major provider – Larger effect
The client, a major North American infrastructure owner, had already reached significant GHG emission targets in relation to Scope 1 and Scope 2 type emissions and had started the process of calculating Scope 3 emissions for their supply chain. Scope 1 and 2 categories relate to the direct production of carbon emissions through systems the organization controls and the indirect emissions created by the energy it buys or consumes.
Already with the ambitious target of achieving carbon neutrality by 2030, the client also aimed at quantifying, monitoring and managing its Scope 3 emissions, the GHG emissions generated by the suppliers it uses when purchasing goods and services. With over 10,000 third-party suppliers, our client was looking to generate an accurate analysis and to find a suitable methodology focused on the following three key objectives:
- Prioritizing the supply chain categories to achieve targets effectively;
- Facilitating the transition and evaluating the risks of modifying goods and services;
- Securing the supply chain while reducing the overall environmental impact.
The results needed to be accurate and focused, contributing to its strategic plan of being the key driver in efficient decarbonization in the community. Given their purchasing power for several goods and services, the client's move would generate significant positive environmental impacts across their extensive network of third-party suppliers and providers.
We developed an effective tool to measure and manage GHG emissions of purchased goods and services as well as capital goods. This framework and methodology allows the client to prioritize carbon hotspots and reduce emissions while securing its supply chain.
What we've developed for our client isn't simply a study but a management system and personalized approach and tool to track supply chain emissions over time. It is an innovative and cost-effective approach, that facilitates decision-making and helps drive change internally
Director Sustainability and ESG, CGI in Canada
How CGI helped
With mature GHG emission reduction processes already in place for their Scope 1 and Scope 2, the client had a reputation for environmental stewardship. They looked to the CGI team to deliver a tailored, innovative solution that would generate tangible results and uphold their stellar reputation for their Scope 3 emissions. To help the client identify reduction opportunities across their supply chain, the CGI Business consulting team:
- Established a methodology to prioritize over 100 supply categories and quantify GHG emissions for over 600 types of products and services, providing a balance between rigor and practicality;
- Prioritized 'hotspot' categories to decarbonize based on several criteria such as supplier decarbonization engagements, GHG reduction potential;
- Leveraged sectoral knowledge to evaluate potential influence over suppliers and projections of amounts of purchased goods and services;
- Assembled GHG emission data using a personalized approach in order to quantify most of emissions related to purchased goods and services;
- Leveraged change management expertise to raise internal awareness.
The project is ongoing, but the benefits are already apparent. The CGI team has produced a management system that lets the client measure and manage their Scope 3 emissions of purchased goods and services as well as capital goods. Our business consulting team also provided change management and sustainable procurement expertise to help engage internal stakeholders, define GHG emission reduction targets, and analyze the company’s top suppliers maturity on decarbonization.
The solution developed by the team can be applied across multiple sectors and has long-term utility. The innovative analytical framework and methodology will allow our client to make strategic decisions in order to have a clear roadmap of opportunities to reduce Scope 3 emissions moving into the future.