Supporting SME suppliers on the net zero journey: a win win

As large corporates with net zero commitments try to make tangible progress and more set their own targets, businesses are assessing the whole supply chain to bring about meaningful change. In creating our own Net Zero Carbon Pathway, we learned that our own supply chain is set to account for more than 50% of our emissions by 2030, making it critical we engage with suppliers and bring them on the journey with us.

In order to decarbonise our supplier emissions, we are working with those partners who share our ambitions and we aim to award high-value contracts to those holding Science Based Targets (SBTs), the gold standard in business emissions reduction targets.

Regardless of size, businesses have to continually outperform themselves year on year, with sustainability transitioning from the ‘right thing to do’ to a requirement for a business licence to operate. This includes suppliers receiving requests from clients to provide sustainability data and proof of action on key issues such as the climate crisis.

All these asks place pressure on Small to Medium Enterprises (SMEs) especially, where resource is lower and sustainability is more difficult to make progress on. At the same time, data on actual SME supplier emissions is lacking, while support available is often costly and geared towards larger corporates. Despite these barriers, SMEs make up estimated 99.9% of all UK businesses and therefore play an important role in achieving individual and national net zero goals.

At Grosvenor Property UK, we decided to empower SMEs in our supply chain to set a SBT through measuring and understanding their carbon impact. Throughout the programme, SMEs were supported to understand: the business case of net zero; how SBTs can help them remain competitive and win business from other sustainability-conscious clients; how to collect data on the areas needed to calculate a full carbon footprint (scopes 1, 2 & 3); as well as action planning for emissions reduction, achieving verified targets and how to offset transparently.

Of the 39 participants, who together accounted for one third of our 2022 spend, 28 have submitted for a verified SBT, while 80% successfully measured their carbon footprint. For those who have set 2030 near-term targets with the SBTi, which commits them to reducing their carbon footprint by at least half, the estimated cumulative emissions reduction is 65,000 tonnes of carbon dioxide equivalents, enough to power 26,000 UK homes for a year.

We chose the charity Heart of the City as our delivery partner for the free eight-month programme. The charity originally supported SMEs in the Square Mile to engage with sustainability and so were well placed to support a similar cohort. Our choice not to charge suppliers increased its accessibility, while we provided clear communication of the fees associated with verifying targets with the SBTi to avoid unexpected costs.

Grosvenor Property UK’s programme demonstrates that by removing the mystery and key barriers for SMEs starting their carbon reduction journeys, they not only help themselves, they also help us to achieve our own goal to be net zero by 2040. We hope this inspires other large corporates to pro-actively engage their suppliers and accelerate climate action, so that every business is covered by an absolute emissions reductions target.