Are your customers pushing you to decarbonize?
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Climate pressures are moving upstream
Leading global companies are intensifying their focus on their Scope 3 greenhouse gas (GHG) emissions. Primarily driven by a company’s supply chain (purchased goods and services, and capital goods), Scope 3 emissions can constitute 90% or more of the total GHG emissions for a large corporation.
As large corporates begin to reach the practical limits of their own operational carbon management (Scopes 1 and 2), they are pushing climate expectations upstream and going beyond carbon accounting disclosures to demand real decarbonization as condition of doing business.
While climate action faces new policy headwinds in the U.S., these companies continue to push progress as they serve global markets and make long-term investments.
Scope 3 reduction requirements, originally aimed only at large suppliers, are increasingly including a wide range of companies across industries, from small firms to specialty providers to global enterprises:
- AstraZeneca requires that 95% of its suppliers by spend set science-based targets by 2025, aiming to halve its entire value chain footprint by 2030.
- Amazon mandates that key suppliers, responsible for over 50% of its Scope 3 emissions, provide decarbonization plans and demonstrate progress toward net-zero goals.
- Unilever targets approximately 300 key suppliers, representing around 44% of its Scope 3 GHG emissions, to cut emissions by 2030.
- Nestlé integrates climate targets into sourcing by working with suppliers to reduce emissions and aims to source 50% of its key ingredients through regenerative agriculture by 2030.
For suppliers, including middle market businesses, their ability to show credible carbon reduction progress is becoming a competitive edge and a must-have management practice to serve enterprise customers effectively.
Navigating supplier requirement: common challenges and checklist
At Rappel, we work closely with companies responding to supplier decarbonization requests and requirements. Here are three important questions suppliers need to answer to effectively meet increasing expectations.
1. Do we understand the ask?
Suppliers often aren’t sure what a supplier request really entails or how they can meet customer expectations. Without that clarity, it’s hard for suppliers to engage confidently, evaluate tradeoffs, or know what they are actually committing to – whether that’s a corporate-wide Science Based Target, a customer-specific emissions objective, or something else to show progress.
🔍 Real-world snapshot:
A large fleet management company received requests from multiple customers to set a science-based target, but neither the company nor the customer fully understood what the request entailed.
👉 Rappel worked with the fleet manager’s client-facing teams to craft responses that acknowledged the request, clarified the ask, and identified potential next steps. Based on that customer dialogue, we worked with the fleet manager to propose customer-specific decarbonization metrics that met key customer requirements with more specificity and created greater partnership between the fleet manager and its customers.
✅ If you’ve just received a decarbonization ask, here’s a quick gut check:
▢ We know what the customer is actually asking (e.g. SBT, SDA, Net Zero).
▢ We have a contact we can go to with questions or alternatives.
▢ We know whether the ask is flexible or fixed.
2. Do we have the right people involved?
Customer decarbonization requirements are often fielded by sales and account leaders, who are eager to say “yes” to win or keep the business. But decarbonization commitments affect all parts of an organization, from finance to operations to procurement.
When these stakeholders get left out of the initial decision-making, companies can face the uncomfortable prospect of delaying or even undoing pledges made to their key customers. It’s crucial to coordinate executive leadership, sustainability, ops, finance, procurement, and customer success early to build an effective company-wide approach.
🔍 Real-world snapshot:
A global services company had their ESG team leading supplier responses with their sales team. But without involvement from finance or operations, the company lacked a clear way to evaluate their decarbonization tradeoffs and priorities, delaying their responses and commitments to critical accounts.
👉 Rappel reset the process: we implemented a best-practice steering committee framework to quickly identify and prioritize the right people to involve. Rather than creating bureaucracy, the steering committee enabled our client’s ESG leaders to effectively access all relevant parts of a large, complex organization and to build executive buy-in for how to address the decarbonization needs of their key customers.
✅ Check your internal alignment:
▢ Executive leadership, sustainability, ops, finance, procurement, and customer success are aware of our customer requests and involved in determining our response.
▢ We’ve had cross-functional discussion around the risks and tradeoffs of committing, or choosing not to, to the customer’s decarbonization request.
▢ We have a clear internal owner of our response and a way to coordinate the decision-making.
3. What does it take to do it? Are we ready to commit?
Suppliers are often stuck on how to respond to customer decarbonization requirements because they don’t know what their companies will need to do in order to meet these requirements, both operationally and financially. That’s why it’s essential to demystify requirements and clarify priorities, so companies can shift from being reactive to proactive to nurture trust with existing customers.
🔍 Real-world snapshot:
A packaging manufacturer was facing pressures to set a science-based target from investors and customers alike. They wanted to decarbonize but unsure if they could meet stakeholder reduction requirements while continuing to grow at a rapid pace.
👉 Rappel used our CO2-AIM carbon and financial model to evaluate the requirements for setting an SBTi target. The company had the opportunity to drive significant operations savings through energy efficiency and renewable, but their levels of growth made a formal SBTi cost prohibitive. Instead, we used scenario modeling to develop an economically feasible carbon intensity reduction target that aligned with the expectations of its customers and investors.
✅ Before committing, make sure you can say:
▢ We understand the technical and financial requirements to meet our customer request.
▢ We’ve mapped roles, responsibilities, and cross-functional dependencies to deliver on the ask.
▢ We’ve validated that we have the data, resources, and timeline to follow through.
▢ If we’re not ready, we have a clear and constructive response plan.
✈️ What Success Can Look Like: StandardAero
StandardAero, a global aircraft maintenance, repair, and overhaul (MRO) specialist, needed to demonstrate it could reduce GHG emissions in line with customer expectations.
Rappel worked with StandardAero to:
- Clearly define their targets and objectives
- Coordinate sustainability, finance, and operations, and sales functions from the start
- Build a credible reduction plan grounded in operational reality and financial savings
👉 The result: StandardAero made industry-leading emissions reductions commitments, responding to key customers with a constructive and credible decarbonization roadmap that deepened trust and partnership.
🔧 Need help navigating how to best respond to customer requirements?
We work with financially motivated companies to navigate decarbonization and operational excellence opportunities with specificity and affordability in mind.