Visibility, transparency, disclosure and partnerships are among the top factors that can help organizations reduce emissions across the entire supply chain. Improving these four scopes or opportunities is crucial in achieving ESG (Environmental, Social and Corporate Governance) goals, while embracing sustainable measures.

The key contributors of scope one, two and three emissions have long been identified as electricity and heat; oil and gas; bitcoin mining; transportation; agriculture; manufacturing and forestry. Industry and sustainability experts have time and again highlighted how these industries can change traditional ways of working to reduce these emissions, without impacting productivity and efficiency.

1. Visibility

Visibility is an internal process—the ability to see into the functioning at every level of an organization’s value and supply chain. It gives stakeholders the room to share valuable data and inputs with each other, bringing them on the same page for greater efficiency.

Among relevant data that creates a difference in an organization’s output are information on raw material sourcing, daily production activities, reports on quality control inspections, rectifications that include corrective and preventive measures, factory audits, labor conditions that includes human slavery and assurance on compliance and certification.

“From the overall ESG accounting perspective, when we look at operations of an organization that’s concerned about the environment and wants to embrace sustainability measures to make the difference, everything falls into two major buckets: Energy efficiency and GHG emissions,” says Vijayanand Gejji, Practice Head - Sustainability Engineering and Cost Management CoEs at HCLTech.

“Company A’s scope one emissions can be different from company B’s scope one emissions, and both might have the same number of emissions, if the former’s scope one is compared to the latter’s scope three. So, it can vary, and this is where visibility helps. From raw material usage to daily production activities and many more, these can be seen through an energy-efficient lens. Greenhouse gas emission issues can also be addressed with renewable energy sources and raw materials can be shifted (refused and reduced) from its linear usage to a more circular usage where products can be reused, repurposed or recycled,” he adds.

2. Transparency

Enabled by visibility in the value and supply chain, transparency is the next step that involves the sharing of information or data like manufacturing details, product quality and safety standards information with external stakeholders and shareholders.

Clearly communicated information that is factually correct helps develop trust with suppliers, consumers, clients and the public and creates an image of being honest and upfront about practices, which ultimately boosts brand loyalty.

However, there is a thin line of difference between transparency and disclosure. With a clear picture of all its internal processes, an organization might not reveal its carbon emission rates at all levels; rather looking to rectify it before sharing its sustainability plans and steps toward carbon neutrality.

“Large-scale internal assessments bring in visibility in an organization’s entire process. In the first step toward transparency, the organization should start reporting, establish a baseline, start addressing all the gaps, benchmark data and focus on a long-term strategic commitment for improvements to have the biggest impact throughout that journey,” says James Trebilco, Senior Sustainability Manager at HCLTech.

He adds: “These assessments tell the company where interventions are needed. Generally, such interventions mean technology adaptions. Technological interventions include a significant amount of internal and external collaborations on technology and platforms and bring in a fundamental change in the organization’s culture itself.

“This is where sustainability enters as a parameter across the product realization cycle—be it design, manufacturing or supply chain. Shifting from the linear process, when sustainability teaches how to reuse, recycle and repurpose products across the product lifecycle, it brings along a cultural shift that can happen through a significant amount of employee engagement, stakeholder and supplier collaboration and education.”

3. Disclosure

Businesses have always been wary of revealing too much information on their sourcing of raw materials and the origin of products or being vocal about its daily and internal processes, which includes carbon emissions. Factors like being less competitive and criticism of its practices have even been a matter of concern with packaging of end products and transportation.

Among topics for disclosure, best practices, sustainable goals and environmental and societal causes come into play. An honest organization can highlight how:

1. it moved away from traditional ways and with technological interventions has reduced its carbon footprints
2. it saved excess use of electricity and used renewable energy wherever it has been possible in the value chain
3. recycling and reusing products saved company expenditure
4. beneficial its sustainable consumerism initiatives have been
5. it has been able to indulge its suppliers with return policies
6. customers have heavily and frequently returned packaging material to gain points for their next purchases
7. it has aligned itself with Taskforce on Climate-related Financial Disclosures (TCFD) and the Global Reporting Initiative (GRI)
8. it has heavily invested in carbon offsetting and showing the difference between its green claims and greenwashing
9. it has directly contributed to the environmental causes, like removing plastics from the oceans, reviving freshwater bodies and planting saplings
10. its philanthropic initiatives helped the society that includes feeding the malnourished and educating underprivileged children

“Sustainability as a parameter across the product lifecycle brings complete transparency and traceability of the overall constituent of the product itself. Not only the carbon footprint, but it also brings in the social factor. When we look at the traceability in the consumer or lifestyle products like shoes or clothing, traceability [and disclosure] starts from whether organic and inorganic materials are used and sustainable practices were adopted during the manufacturing process, whether modern slavery was a part of it and which part of the world did the manufacturing happen—if it was in modern slavery zones,” says Gejji.

“Look at the newly passed European Union Bill that states anything related to carbon offsets—without putting enough effort, without creating enough evidence of sufficient efforts to control emissions and reduced emissions—will be counted as greenwashing. Therefore, organizations should be significant and accurate in their disclosures and enough efforts should be put to control data sources when their business scenario doesn’t support their claims,” he adds.

4. Partnerships

All of the factors discussed above—visibility, transparency and disclosure—apply when an organization partners with another organization. It can be with its suppliers, collaborators, third parties, investors and external limited-time partners.

With visibility and transparency in its value and supply chain, the long-lasting bond with these external parties is built on trust and best practices that drive continuous improvement. Goodwill is built on ethical and responsible ways of working in an organization. It’s a two-way process where partners develop a good impression among their peers and in the entire industry.

“Methodologies and instruments like lifecycle assessment play a big role. And that is what, as a team and as an automation partner, we keep advocating to bring transparency across,” says Gejji.

How HCLTech is helping across the four scopes

1. With its digital transformation expertise, HCLTech has partnered with several organizations with business applications and enterprise platform modernization, while shifting their digital business to cloud infrastructure
2. With its Supply Chain Management (SCM) solutions that redefine the supply chain pathway, HCLTech has helped its clients achieve greater collaboration among stakeholders, boost service levels across planning and forecasting, strategic sourcing and procurement, fulfillment and after-sales services
3. HCLTech IoTWoRKS™ has spread its expertise with real-time information connecting users, products, infrastructure and operations across the manufacturing, healthcare, energy and utilities and the travel, transportation and logistics sectors
4. HCLTech Data & AI on Cloud combines services to modernize enterprise data and analytics environments, including data sciences and data and analytics platform
5. HCLTech sustainability practices are globally recognized and reflected in its digital transformation processes and partnerships

“Collaboration, partnership and advocacy are needed across the entire value stream. When companies with different emission levels look to work together, we need all of them to be moving in a way that can be synonymous with the next person or the next company or down the value and supply chain in the same and most sustainable manner. So that’s how transparency and collaboration fit together in supply chain engagement and understanding,” says Trebilco.

He adds: “When big players join the game, they can influence the reporting, engagement through the supply chain, improve environmental performance and sustainable sourcing like production practices, and implement responsible procurement strategies, such as transitioning to renewable energy and setting ambitious targets. Instead of investing in carbon credits and continuing to pollute, they can influence with the transition of traditional techniques to sustainable ways.”