**London**: Retailers are grappling with significant sustainability hurdles, notably concerning Scope 3 emissions from supply chains. Tim Weiss of Optera discusses the need for accurate emissions data and supplier collaboration to drive effective decarbonisation strategies amid evolving regulations and growing market pressures.
Retailers are at a critical juncture in their sustainability efforts, spurred by increasing regulatory pressures and the urgent necessity of climate action. In an extensive discussion with Women’s Wear Daily, Tim Weiss, cofounder and chief executive officer of Optera, highlighted various challenges and opportunities facing brands in their journey towards decarbonisation.
According to Weiss, the primary concern lies in the complex structure of supply chains. He pointed out that a staggering 90 to 98 percent of emissions linked to retailers originate from their value chains rather than their direct operations, which include aspects like energy use and company vehicles. These indirect emissions, categorized as “Scope 3” emissions, present significant hurdles for retailers who lack control over their suppliers and the ability to access direct emissions data.
Without comprehensive supplier sustainability data, Weiss noted that retailers struggle to develop viable strategies to manage and reduce risks associated with their supply chain emissions. “When retailers rely on industry-wide average data for their emissions accounting, they can’t determine which suppliers pose the greatest risk and opportunity or which they should prioritize for engagement,” he explained. This situation often leaves companies vulnerable and ill-prepared to meet new regulations and navigate an evolving energy landscape.
Complicating matters is the uncertainty surrounding trade policies and regulations, which may delay vital sustainability investments. For instance, fluctuations in tariffs can affect emissions reports that are calculated based on spending, leading to unreliable assessments of progress made in sustainability initiatives.
Data integration is another challenge faced by retailers, according to Weiss. “Retailers are often faced with fragmented systems, siloed data ownership and inconsistent formatting and quality,” he stated. The difficulties are compounded when aggregating data from numerous suppliers, especially as many suppliers may lack resources to accurately calculate their emissions. The issue of verifying self-reported data adds another layer of complexity, making the creation of an accurate emissions database a formidable task.
Optera’s solution lies in its comprehensive carbon management platform, which aims to empower retailers by providing actionable emissions data that moves beyond simplistic spend-based calculations. The platform has enabled thousands of suppliers in over 25 countries to share primary emissions data with corporate clients, thereby supporting targeted decarbonisation efforts.
Weiss further explained that successful sustainability initiatives require active collaboration with suppliers. “We’ve seen the most success when our clients build supplier engagement programs across sustainability and supply chain functions,” he noted. Such partnerships foster data collection, performance tracking, and collaborative efforts to achieve common sustainability goals.
Looking at the broader market trends, Weiss identified two main forces driving corporate climate action: regulatory and market pressures. The evolving landscape of regulations mandating climate risk disclosures is expected to impact every sizeable enterprise globally. Furthermore, there is a growing demand for sustainable products and services from investors and consumers alike.
In a survey conducted for Optera’s 2024 Trends in Corporate Emissions Management report, 76 percent of respondents indicated that brand differentiation motivates their emission reduction efforts. Additionally, over 90 percent reported emissions either publicly or to regulatory bodies. Notably, nearly half of the surveyed companies have begun incorporating value chain emissions into their science-based decarbonisation targets. Approximately seven in ten are actively working to facilitate decarbonisation efforts among their suppliers, signifying a notable shift in corporate focus towards comprehensive climate strategies.
As the timeline for reducing carbon emissions tightens, retailers are under increasing pressure to enhance their sustainability practices, embarking on a journey that requires not just internal change but collaborative efforts throughout their supply chains.
Source: Noah Wire Services
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