Panellists:
- Anne Sheehan, Director, Victoria’s Secret and Co.
- Jessica McDonald, GFL Environmental, Couer Mining
- Duncan Wood, Wilson Center
- Luis Miguel Vilatela Riba, Managing Director, Valora Mexico
This session discussed how supply chain strategy is gaining greater prominence within the boardrooms as organizations manage their transition to a net zero future. Supply chain strategy is a critical issue for boardrooms across North America as organizations face transportation bottlenecks, increased political risk, sustainability concerns and increased trade barriers. New rules for climate change disclosure are prompting boardrooms to re-evaluate how these new rules might impact their current supply chains and climate strategy.
Given the increased expectations around ESG performance from stakeholders, sustainability practices are being greatly scrutinized, meaning companies that reduce Scope 3 emissions can have a strategic advantage when it comes to access to capital and financial performance.
Understand your current position
Before boards evaluate their supply chains and incorporate them in their climate strategy, they should have a firm grasp of the organization’s Scope 1 and Scope 2 emissions. Directors should also ensure ESG policies are authentic and meaningful to the company and not simply a tick-the-box exercise. When these policies are ingrained in company processes – instead of borrowed templates – the effort to reduce Scope 3 emissions doesn’t add a significant new workload.
Define oversight
It’s critical to define who, at the board level, will oversee the process of evaluating supply chains against climate strategy. The information necessary for proper oversight should also be established, including activities such as where and how inputs are produced, and labour, material and transportations issues. Directors must ask for regular reports from management on developments within the organization and sector. Boards should also be transparent and report their progress to all stakeholders.
Choosing your initial targets carefully
Engaging closely with companies responsible for the bulk of emissions within the organisation’s supply chain is critical. This engagement will help the organization access more accurate supplier information and reduce the potential for reputation damage. It also shows suppliers you’re willing to help them meet requirements. Organisations that share best practices, provide training and communicate well will be perceived as supportive partners instead of demanding businesses.
It’s critical to work together with your supply chain partners closely, define objectives for each and then develop targets and progress for change. By working closely with partners and understanding how each contributes to an organisation’s climate emission reduction strategy, boards, are able to track progress and milestones effectively, while ensuring supply chain partners are held accountable for their emissions reduction progress.
Ambition to Action: Key actions for boards
Understand the board’s oversight role:
– Ongoing monitoring, reporting and transparency are critical for holding all partners accountable and ensuring stakeholders are aware of a company’s position
– Education is critical
– Ongoing training and skills upgrading is critical for all board members to ensure they remain abreast and informed of best practices
– Transparency
– As companies rethink supply chains through the lens of climate change, boards of directors must be informed and committed to change
This summary was provided by the hosts.
Slingshot