Daniel: Hello and welcome back to the Supply Chain Dialogues. My name is Daniel Helmig. And I'm not being joined by my AI co host today and I explain you a little bit about that later. In this episode we do something we have never done before. Actually, we could not have done it before.

Those that follow the podcast for a while we'll know that from the early start, I played around with AI to present content. Now, with OpenAI, Claw, Gemini, and many more, things moved from, okay, that's cute, towards, wow. When it comes to speaking with AI models, massive improvements happened in the last month, I'd say.

When I'm on the road, for example, I talk with ChatGPT and get a quite intelligent conversation going.

As a podcaster, however, I was floored when I realized the capabilities of using Notebook LM from Google. Since I strongly believe that many of today's issues can only be resolved with more science and technology, I will give you an example of the art of the possible that is near magic, from my perspective. Instead of Amy, My, let's be real, AI sock puppet and me doing this episode, I loaded the script into a Google’s NotebookLM®© and got two US American AI cousins of Amy to talk about what we researched before. Outcomes are the ten best principles for engaging suppliers to lower greenhouse gas emissions, with real-life examples from companies living and breathing these solutions today.

So, get ready for quite different episodes that are very Americanized. If you can get over the accents, as you as well do with mine, be amazed. Without further ado, let's get into the show.

Jill: Hey, everyone, and welcome back for another deep dive with us. Today, we're going to be looking at something, uh, that's pretty important, I think, to many companies these days, getting their [00:02:00] suppliers on board with reducing greenhouse gas emissions.

Jack: Yeah, this is a much bigger topic than many folks realize.

Jill: It is.

Jack: We've got a great podcast episode for you to unpack today from Supply Chain Dialogues. What we found so fascinating is that supplier emissions can actually be more than 70 percent of a company's carbon footprint.

Jill: Yeah, it's like this hidden impact, right? We think about our own companies and how much we're polluting, but it's really like, all the stuff that goes into making the stuff that we sell, you know, it's in that supply chain. That's where the real action is.

Jack: It's like this tangled web.

Jill: Yeah, it really is.

Jack: And, you know, it's not as simple as just telling your suppliers, hey, you need to pollute less.

Think about it from their perspective. Especially those smaller suppliers that might be, you know, just barely getting by. It's tough for them to find the resources to make big changes. And if it's not directly impacting their bottom line, why would they prioritize, you know, sustainability over just staying afloat?

Jill: Yeah, that makes sense. So for this deep dive, what we really want to figure out is what are the strategies that actually work to get suppliers on board with reducing emissions?

Jack: I think both the podcast and the article we looked at really emphasized. Science-based targets are called SBTs.

It's all about having this shared goal, but not just any goal. It has to be based on what climate science says needs to happen.

Jill: Yeah. Rooted in science and using frameworks like the SBTI actually to make sure those numbers are legit.

Jack: Exactly. So. You know, it's not just companies coming up with random numbers.

They're actually using real data and science.

Jill: It has tooth.

Jack: Yeah. And that sends a really strong signal to suppliers that this company is not messing around. This is not just some greenwashing scheme. This is a long term commitment.

Jill: Yeah, they're putting their money where their mouth is. And we see this with companies like Unilever, for example.

They're aiming for net zero emissions across their entire value chain by 2039.

Jack: That's massive.

Jill: It's huge, right? Yeah. And they're not just doing it themselves. They're working directly with their suppliers to help them get there, too.

Jack: And that's key. [00:04:00] When a company like Unilever makes that kind of commitment, it incentivizes the suppliers to, you know, invest in long term solutions because they know that Unilever is in it for the long haul.

Jill: It creates this ripple effect, almost. Where sustainability becomes not just a nice to have, but like a must have to stay competitive in the industry.

Jack: It sets a new standard.

Jill: Yeah, absolutely.

Jack: And that brings us to another really important strategy. Integrating sustainability into how you actually choose your suppliers in the first place.

Jill: Oh, that's interesting.

Jack: Yeah, companies have so much purchasing power. A

Jill: lot of power, yeah.

Jack: It's like they're saying, if you want to work with us, you better step up your sustainability game.

Jill: I like that.

Jack: And a great example of this is Walmart. They have this super detailed supplier questionnaire.

Jill: Yeah. Oh, wow.

Jack: That digs deep into their environmental practices.

Jill: Mm hmm.

Jack: Especially, you know, greenhouse gas management and the results of that questionnaire actually determine who they do business with.

Jill: So it's not just like a box to check.

Jack: It's a big deal. Yeah. They're serious about it.

Jill: What about those suppliers, though, that maybe don't have all the resources or the knowledge to meet those higher standards?

We can't just like demand change without Providing some kind of support, right?

Jack: You're absolutely right. And that's where training and capacity building come in.

Jill: Okay.

Jack: It's about understanding that not all suppliers start at the same level.

Jill: Right.

Jack: P& G has this really great model.

Jill: The folks behind like Tide and Pampers and all that.

Jack: Exactly. They have this thing called the Supply Chain Environmental Sustainability Scorecard.

Jill: Okay, what is that?

Jack: So they basically assess the environmental performance of their suppliers, including greenhouse gas emissions.

Jill: Mm hmm.

Jack: But they don't stop there. They also provide resources and training programs to help those suppliers actually improve their scores.

Jill: I like that. It's a combination of like, you know, evaluation, but then also empowerment.

Jack: It's meeting them where they are.

Jill: Yeah.

Jack: And giving them the tools to do better.

Jill: Okay, so we've got ambitious targets. We've got training.

Jack: Right.

Jill: But how do we actually make sure everyone's following through on [00:06:00] these commitments?

Yeah.

Jack: You're hitting on a really important point.

Jill: Yeah.

Jack: Because promises are easy to make, but keeping them.

Jill: Right.

Jack: That's a different story.

Jill: How do companies actually ensure that suppliers are walking the walk, not just talking the talk?

Jack: That's where transparency and accountability come in.

Jill: Okay.

Jack: It's all about having verifiable data.

Jill: Uh huh.

Jack: Not just good intentions. Right. A company like Nike, they require their suppliers to disclose their emissions data through platforms like CDP.

Jill: CDP. The

Jack: Carbon Disclosure Project.

Jill: Okay.

Jack: It's all about making that information public and accessible.

Jill: So you can't hide.

Jack: Exactly. And this data allows companies to see exactly where emissions are coming from.

Jill: So you can target your efforts.

Jack: Exactly.

Jill: Okay.

Jack: You're not just, you Throwing darts in the dark.

Jill: Makes sense.

Jack: You can be strategic about it.

Jill: Okay.

Jack: But sometimes, it's not just about doing things more efficiently. It's about doing things differently.

Jill: Okay, I like that.

Jack: That's where technology and innovation come in.

Jill: Now we're talking.

Jack: You can't expect different results by doing the same old thing.

Jill: Right.

Jack: You need to get creative.

Jill: Uh huh.

Jack: Think outside the box.

Jill: I like it.

Jack: Ford, for example, is partnering with their suppliers to explore these new, lighter materials for their vehicles. Oh,

Jill: that's interesting.

Jack: Things like carbon fiber magnesium, even plant based plastics made from mushrooms and soybeans.

Jill: Wait, mushrooms and soybeans? Yeah. That's so cool.

Jack: They're experimenting with all sorts of cool stuff.

Jill: That's awesome.

Jack: And these lighter materials can actually significantly reduce a vehicle's weight, which leads to lower fuel consumption and fewer emissions.

Jill: So it's a win win win.

Jack: It is.

Jill: Good for the planet, good for the business.

Jack: Absolutely.

Jill: And cool for the listener to know. Okay, but let's be real for a second. A lot of these business decisions, especially in those complex supply chains, really come down to the bottom line. So how do companies make sure that going green actually makes financial sense for their suppliers?

Jack: You're hitting on a really important point.

Jill: Yeah.

Jack: Incentives matter. Of course. You can't just rely on [00:08:00] goodwill. Right. Companies like General Motors are getting really creative with programs that actually reward suppliers for hitting emission reduction milestones.

Jill: So what kind of rewards are we talking about here?

Jack: We're talking about things like preferential contract terms, increased business opportunities, even straight up financial bonuses.

Jill: Wow. Okay. So real money.

Jack: Real money.

Jill: Not just a pat on the back.

Jack: And some companies will even publicly recognize their suppliers for their achievements.

Jill: That's a nice touch.

Jack: A little bit of good PR never hurts.

Jill: No, it doesn't.

Jack: But the main point is that they're demonstrating that sustainability isn't a burden.

It's an opportunity.

Jill: Okay.

Jack: An opportunity for suppliers to save money, win more business, and boost their reputation.

Jill: And in today's market, where consumers are more and more interested in sustainable products, that's a really smart move.

Jack: It's a competitive advantage.

Jill: Yeah, it is. But

Jack: sometimes the smartest move of all is actually to collaborate.

Instead of just dictating what suppliers should do, companies are starting to realize that working together, sharing knowledge and resources, can lead to much more effective solutions.

Jill: That two heads are better than one approach.

Jack: Exactly.

Jill: Especially when you're dealing with something as complex as, you know, supply chain sustainability.

Jack: And a great example of this is Ikea, they're working on joint projects with their suppliers in areas like renewable energy and energy efficiency, creating this sense of shared ownership.

Jill: Oh, I like that a lot. And speaking of renewable energy, encouraging suppliers to switch to cleaner energy sources, obviously that's a huge step towards reducing emissions.

Jack: That's essential.

Jill: Right. But as we've talked about, that transition can be pretty daunting, especially for those smaller suppliers who might not have the resources or the know how to make that switch.

Jack: Absolutely. It's not as easy as just flipping a switch. It requires planning investment and often a whole new way of thinking about energy.

Jill: And this is where I think companies like Apple are doing a great job with their Supplier Clean Energy Program. They're going above and beyond to support their suppliers in that transition.

Jack: It's a really hands [00:10:00] on approach.

Jill: Oh, that's awesome. They're

Jack: not just saying, hey, you should switch to renewable energy.

They're actually providing concrete support.

Jill: Okay, so tell me more about that. How does that work in practice?

Jack: They provide technical expertise. They connect suppliers with renewable energy providers. And they even help them navigate the often very complex process of actually procuring that renewable energy.

Jill: So they're like holding their hands through the process.

Jack: Exactly. That's

Jill: amazing.

Jack: It's a true partnership.

Jill: Yeah, it's a great example of how larger companies can use their resources and expertise to do. Thank you. Really empower their suppliers to make that shift towards cleaner energy,

Jack: and it's inspiring to see

Jill: it is.

So we've got all these great best practices But how can companies ensure that their efforts are sustainable in the long run?

Jack: That's the key question It's about going beyond one time projects and creating a culture of continuous improvement

Jill: Okay,

Jack: sustainability needs to be woven into the fabric of the company Transcripts

Jill: provided

Jack: by Transcription Outsourcing, LLC.

to reduce emissions and minimize environmental impact.

Jill: It's like having that mindset of always seeking improvement, right? Exactly. Always pushing those boundaries.

Jack: And PepsiCo is a great example of this, with their positive agriculture approach.

Jill: I was just thinking about that. They're working with their suppliers to implement sustainable farming practices.

That benefit not only the environment, but also the farmers bottom line.

Jack: A win win for everyone involved.

Jill: I like that.

Jack: It shows that sustainability doesn't have to come at the expense of profitability.

Jill: Right.

Jack: It can actually enhance it.

Jill: Okay, so we've talked about aligning with those established standards and frameworks as well, to make sure all these efforts are kind of in line with global best practices.

What's the thinking behind that?

Jack: It's all about creating this common language for sustainability. Ah. Those frameworks [00:12:00] provide a set of universally recognized principles and guidelines to make sure everyone is on the same page when it comes to defining and measuring sustainability.

Jill: Okay, so it's like a universal translator for sustainability.

Exactly. Make sure everyone's speaking the same language. Exactly. Working towards the same goals.

Jack: And one of the most widely recognized frameworks is the UN Global Compact.

Jill: Right.

Jack: It covers human rights, labor, the environment, anti corruption.

Jill: So it's really broad.

Jack: It's holistic.

Jill: Okay.

Jack: It's about promoting responsible business practices across the board.

Jill: It's not just about the environment.

Jack: Exactly.

Jill: Okay.

Jack: And we're seeing companies like Nestle fully committing to aligning their entire supply chain.

Jill: Yeah.

Jack: With those UN global compact principles. That's a big

Jill: deal.

Jack: It is it shows that they're serious about it.

Jill: Yeah,

Jack: it's not just lip service

Jill: They're holding themselves accountable.

It's amazing how much we've learned just from these ten best practices Like there are so many different ways that companies can engage their suppliers on a mission reduction

Jack: There's no one size fits all approach

Jill: right and that's okay. It's

Jack: about finding what works best for each company

Jill: What matters is that they're taking action, that they're recognizing the importance of collaborating with their suppliers to build a more sustainable future.

Jack: It's a collective effort. It

Jill: is.

Jack: And it's inspiring to see this shift happening across industries.

Jill: Yeah, from those tech giants like Apple to, you know, consumer goods companies like Unilever and PepsiCo.

Jack: It's exciting.

Jill: It is. And it's not just those big companies, even smaller businesses are finding ways to make a difference.

Jack: Every effort counts.

Jill: I love

Jack: that. Every step towards a more sustainable future, no matter how small, adds to that collective momentum.

Jill: Yeah. And as we wrap up this first part of our deep dive, what really strikes me is this. We all have a role to play in creating a more sustainable world. It's not just about those companies and their suppliers.

It's about each of us recognizing the interconnectedness of our choices and our actions.

Jack: It starts with awareness.

Jill: Right.

Jack: The more we understand the impact of our choices. [00:14:00] The more we can empower ourselves to actually make a difference.

Jill: So it's about choosing to support those companies that are committed to sustainable practices, holding the ones that aren't accountable.

Jack: And it's about having these conversations, spreading awareness, inspiring others to take action.

Jill: We're all part of the solution here.

Jack: We are. Every choice we make, every action we take can contribute to a more sustainable future.

Jill: And it might feel like a small step, but imagine the collective impact of millions of people making those choices.

Jack: Those small steps can lead to giant leaps forward.

Jill: Yeah, and never underestimate the power of just asking questions. If you're curious about a company's sustainability practices, reach out, do your research, let your voice be heard.

Jack: Consumers have a lot more power than they realize.

Jill: So, let's bring it back to you, our listener.

We've explored 10 powerful best practices for engaging suppliers on emission reductions. And we've seen some inspiring examples of companies taking action.

Jack: We've learned that it's not just about companies and their suppliers. It's about all of us. Understanding how interconnected our choices and actions really are.

Jill: We want you to think about the products that you use every day.

Jack: Think about the companies behind those products and think about their impact on the environment.

Jill: What would it look like for those companies to really commit to engaging their suppliers on emission reductions?

Jack: Could your buying decisions actually influence that change?

Jill: Every purchase is a vote.

Jack: Every choice we make shapes the world around us.

Jill: So let's choose wisely, let's demand better, and let's work together to create a more sustainable future for all. We'll be back in a moment with more insights on this important topic. Don't go anywhere.

Jack: You know, it's easy to feel like our actions are just a drop in the ocean, right?

Jill: Yeah, I get that feeling sometimes. Like what difference can one person really make?

Jack: Right. But think about it. If millions of consumers start making those conscious decisions, those ripples, they can turn into waves.

Jill: I like that analogy.

Jack: And those waves can really push companies to [00:16:00] change.

Jill: Yeah, they can.

Thanks for joining us on this deep dive.

Jack: It's been a pleasure.

Jill: Keep learning, keep asking questions, and keep making those choices that matter.

Jack: We'll see you next time.

Daniel: Now, this was a lot of stuff if you'd like to reread some aspects that are relevant to you, you can go on our website to the podcast area, click into this episode, and then the transcript is in the lower part of the screen.

You will find a cleaned-up version of what was discussed.

I hope you enjoyed this episode of the Supply Chain Dialogues. Please subscribe to Apple, Spotify, YouTube or any other central podcast platform if you do. And tell someone who is in charge in getting to net zero, like your CEO or any board member or manager, send them the link to the episode and spread the word.

With that, stay safe, be bold, and see you in two weeks. These are the Supply Chain Dialogues produced and copyrighted by helmig Advisory in 2024.