To reach our sustainability goals, we need to decarbonize our entire supply chain
OCTOBER 28, 2022 – BY PIET H. TÆSTENSEN, CEO
To reach our sustainability goals, we need to decarbonize our entire supply chain
Like all other products, the sustainability of Aasted products must be understood in the context of supply chain decarbonization. Ultimately, what matters is the cumulative effects of every step from procurement to production and transportation to the end user – not only the links of the chain that occur in Aasted production facilities.
A product’s total carbon footprint is defined by its Scopes 1, 2, and 3 greenhouse gas (GHG) emissions. Scope 1 refers to direct GHG emissions we control through our own production and business processes. Scope 2 covers emissions from the energy that powers our production and other processes, something we also control. Scope 3 emissions, on the other hand, derive from things we don’t control directly, such as the emissions related to the raw materials from which we produce our products (upstream Scope 3) and our customers’ use of our products and their end-of-life disposal or recycling (downstream Scope 3).
Aasted can only reduce the carbon footprint in the supply chain by working closely with our upstream and downstream partners. To decarbonize our entire supply chain, we must therefore also collaborate on activities that lie beyond our scope of direct control.
Sustainable supply chains start with sustainable procurement
Procurement is particularly important. When we assessed the GHG emissions of the Aasted supply chain, we found that a significant share of our end-to-end supply chain emissions are upstream.
In a linear economy, we transform raw materials into products that are eventually discarded as waste: take-make-dispose. In a circular economy, we design products that maintain their added value for as long as possible and eliminate as much waste as possible: reduce-reuse-recycle.
Therefore, Aasted began working with vendors to find ways to reduce these emissions. The first step in this process was dedicated to understanding our suppliers’ current situation regarding not only GHG emissions and other environmental factors, but also the social and ethical issues that we consider central to supply chain sustainability. Specifically, the Aasted Impact Questionnaire assessed five parameters:
Community engagement,
or how the company works with local stakeholders to achieve more sustainable outcomes and build trust.
Environment,
including the company’s Scope 1 and 2 emissions.
Governance,
or the systems used to control and direct the company.
Responsible supply chain management,
e.g., how the company assess its suppliers’ supply chains.
Work conditions and human rights,
e.g., codes of conduct.
Dialogue and transparency are key to success
The output of this initial step was an impact assessment that provided the basis for explorative discussions with, in the first instance, Aasted’s biggest suppliers. How could we, together, reach the goal of reducing Scope 3 emissions by half and no later than 2030?
Conversations of this kind were new for both our suppliers and for us. Although everyone can quickly agree on the necessity to do something about CO2 emissions, just what to do and how to proceed are not immediately obvious. Therefore, we quickly established that an approach characterized by dialogue and transparency was essential if we were to meet our targets to mutual benefit.
Sharing our impact assessments and code of conduct as we try to find common ground for improvement has been an important part of this process. In addition, we worked with students from Roskilde University, who helped investigate how to set up vendor networks that would enable more cooperative efforts towards increasingly sustainable supply chains.
It’s working, but we still have a long way to go
So far, the results of this collaborative process have been very promising.
It is clear that our key suppliers understand and support our goals and are willing to work together to reach our target of a 50% reduction of carbon emissions from our supply chain by 2030. We have made a good start, but still have a lot of progress to make. So far, however, the process strongly indicates that achieving this ambitious goal is achievable if we continue to work together.
– Piet H. Tæstensen, CEO
