Aviva has an ambitious sustainability strategy that requires the support and engagement of our supply chain partners. There is increasing regulatory and investor pressure for companies to address carbon emissions, particularly in the supply chain (Scope 3 emissions).
Organizations can no longer commit to net-zero targets that include only Scope 1 and 2 emissions. It’s imperative to measure, monitor, manage and report on Scope 3 emissions — in order to answer to investors and other stakeholders and to comply with increasingly robust regulatory obligations.
Types of emissions
Scope 1 emissions are direct emissions from owned or controlled sources, Scope 2 emissions are indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company, and Scope 3 emissions include all other indirect emissions that occur in a company’s value chain that are critical to identify and manage.
What are Scope 3 emissions?
As defined in the Greenhouse Gas Protocol, the standard used by the Science Based Targets initiative (SBTi), there are 15 categories of Scope 3 emissions. Category 1: Purchased Goods and Services is related to a company’s supply chain. It includes all upstream emissions from the production of products purchased or acquired by a company. Products include both goods (tangible products) and services (intangible products).
Why are Scope 3 emissions important?
Addressing Scope 3 emissions is essential as part of a sustainability strategy because they are on average 11.4 times larger than direct emissions from operations.
According to a Boston Consulting Group study, more than half of companies are now disclosing at least some of their Scope 3 value chain emissions, up from around a third in 2021. More than 35% are setting Scope 3 reduction targets, an increase from 29% in 2022 and 23% in 2021.
Here at Aviva, we have a goal of a net-zero supply chain by 2030. We’ve compiled some resources and examples from our own supply chain initiatives to help inform your company’s journey.
Addressing supply chain emissions
If you have a robust supply chain, reporting and taking action on Scope 3, Category 1: Purchased Goods and Services should be part of your sustainability strategy. Here are some important steps to consider:
1. Require sustainable practices from all vendors in your procurement process
Aviva asks for our suppliers to agree to set science-based targets and have those targets validated by SBTi or relevant industry equivalent. By doing so, they will measure their own emissions impacts, create their own climate action plans, and publicly disclose their organization’s scope 1, 2 and 3 emissions. Since we began this work in 2022, 112 Aviva Canada suppliers have achieved at least one of these benchmarks.
2. Develop partnerships across the value chain
Prioritize organizations that are focused on developing and leveraging new technologies or are acting on decarbonization. For example, among Aviva’s partnershipsis a collaboration with Wild + Pine, a company that develops verified carbon removal assets through afforestation. Our shared initiative will cover 1,280 acres in Alberta and aims to sequester nearly 275,000 tonnes of carbon over 60 years while supporting regional biodiversity.
3. Encourage suppliers to learn more about decarbonization
Our approach to engage suppliers in taking action on climate change is based on collaboration and support. We accomplish this through informal discussions and information sessions, and more formally through our Net-Zero Supplier Accelerator program and our annual Net-Zero Supplier Summit where suppliers are invited to:
- Participate in a day of discussions around measurable actions their organization can take to reduce its carbon footprint and become net-zero
- Hear from our supplier community who share their success stories and other guest speakers in the sustainability space
- Engage in panel discussions and educational sessions with industry peers and leaders.
The 2024 Summit hosted over 130 supplier attendees with an aim to help build their capacity, better understand their emissions profile and set ambitious targets.
4. Consider the role of nature and biodiversity
Aviva and WWF-Canada have teamed up to offer a resource, Business and Biodiversity: Your company’s path towards nature positivity. It offers science-based information on how Canadian businesses can act to help halt and reverse biodiversity loss, better protect nature and contribute to a more sustainable global economy.
The latest Intergovernmental Panel on Climate Change report found that with greater urgency and more immediate ambitious action, we can still secure a livable sustainable future for all.
As businesses, we must work together to move faster to limit emissions. Aviva is working on it. You can, too.
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Aviva’s Global Corporate & Specialty team is here to answer questions and offer advice. Reach out to us at gcs.ca@aviva.com
