EXECUTIVE SUMMARY
Learning through our collective knowledge
The 170 participating companies in the Benchmark span industries as broad as automotive, food and beverage, manufacturing, and many more. With a total collective revenue of >$2.7 trillion, The Benchmark equates to the world’s 8th largest country by GDP. This group's collective power to decarbonize supply chains is immense, and its experiences to date are invaluable.
Combined revenue of more than $2.7 trillion
Over 51,800 Procurement employees
Working with over 3.3 million suppliers
$195 million budget for Scope 3 activity
Employing more than 8 million people
This second report builds on the initial pilot by showcasing the insights and findings of this broader group. It also provides a vision for the future, breaking down procurement's role in decarbonization into practical steps that can be taken throughout 2024 and into 2025 to move away from planning and towards “doing.”
So, to our cohort. The very fact that these organizations have completed The Benchmark suggests that they are either taking the topic seriously or putting the foundations in place to do so. Within the group, 47% have set 2030 near-term targets, and around a fifth, 21%, have set longer-term targets aimed at 2050. Only 14% have yet to set a target.
The Benchmark is divided into 27 elements, which are grouped into 7 pillars. ‘Leading Organizations’ demonstrated a relative strength in the ‘Strategy’ pillar. This comprises some of the highest-scoring elements in The Benchmark, such as ‘Executive Sponsorship,’ ‘Communication,’ ‘Target Setting,’ and ‘Net Zero Business Strategy.’ At a headline level, all looks well.
The results as a whole prompt a few thoughts;
Are we articulating a compelling business case for investment?
Are we using external support and not hiring internally?
Are we upskilling our existing teams to a “new BAU”?
‘Leading organizations’ are defined in the context of this report as the top-scoring 10% overall.
However, what stops ‘Strategy’ from putting clear water between it and the rest of the pillars is the only specific procurement element contained within; ‘Net Zero Procurement Strategy.’ This element looks at how procurement is translating business ambitions into a commercial strategy and an effective action plan. The ‘how’ and accelerating the journey to an effective Net Zero Procurement Strategy is a key theme of this year's report.
Accompanying ‘Net Zero Procurement Strategy,’ amongst the lowest-scoring elements are ‘Talent’ and ‘Supplier Management,’ which highlights that although the executive agenda contains intent, much of the immediate effort needs to be focused on embedding the fundamentals required to drive change through effective planning, sourcing, supplier, and category management.
The model and data indicate that there’s no one-size-fits-all solution, which may impact functional investment. While 74% of participants disclosed their Scope 3 budget—initially positive—the investment challenge becomes evident when considering it as a percentage of revenue, which remains relatively low for most.
While there is no doubt some truth in all of the above, there is support for point three in particular. Many participants informed us that while significant incremental investment may be tempered, there has been an uptick in the “arms and legs” supporting sustainability and Scope 3 efforts. Participants have outlined how they seek to embed Scope 3 into existing roles and ways of working.
This approach accepts the constraints on budget and resources and offers a different solution to drive progress regardless. However, the lack of progress on some of the other fundamentals is striking, suggesting that although we may be asking our teams to take this on, we have not yet given them the tools to do so.