Driving the ecosystem: engaging our suppliers to reduce Scope 3 emissions

Carbon Neutrality, inside and out

Scope 3 emissions, though not directly caused by our company, still contribute to our overall carbon footprint across the value chain of our operations. To achieve our Carbon Neutrality ambition, it is crucial to measure and reduce these emissions. Air Liquide assesses its carbon footprint along the full value chain of its products and is committed to working with the different stakeholders (suppliers, customers, partners, employees...) to identify levers and reduce its Scope 3 emissions. While challenges exist, we can effectively manage our supply chain emissions through collaborative efforts with our customers, partners and suppliers. Enlightened procurement practices can help us achieve our Carbon Neutrality objective.

Procure to Neutrality

What we buy, and who we buy it from, can have a significant environmental impact. This is why the Group Procurement Department initiated a climate roadmap in 2021, titled “Procure to Neutrality”, which is based on four pillars:

• As an essential first step, since no effort can be tracked nor any commitment assessed as long as the calculation relies on statistical parameters, it is important to Measure, to enhance the methodology for calculating Scope 3 where relevant and feasible;
• Engage the procurement community, through dedicated trainings on Sustainable Procurement topics, and engage with suppliers to share our expectations and coordinate for a better understanding on their carbon footprint and subsequent action plans to reduce their emissions;
• Leverage our procurement activities to effectively reduce emissions across the entire value chain; and
• Reduce: define a Scope 3 reduction objective, aiming to align with the Group’s Carbon Neutrality ambition.

Our award-winning TCO₂ tool

By including sustainability criteria in our supplier selection process for key categories, we strive to boost supplier awareness on climate-related topics. Thus, catalysing the decarbonization of the entire value chain. Our TCO₂ tool makes our CO₂ reduction objectives tangible by integrating them into three supplier selection criteria: the TCO (total cost of ownership), the risk assessment and the TCO₂ (total CO₂ emissions).

The tool:

• Gauges the maturity of a supplier’s net zero activity;
• Measures the projected carbon footprint of a supplier’s offer;
• Applies criteria weighting tailored to the category being procured;
• Sets a minimum required TCO₂ score to be eligible to tender from 2024, and onwards; and
• Will progressively raise the bar for supplier selection, setting the pace for ever-higher standards for our value chain.

Improvement, at scale

As of today, 78% of our procurement community have completed the first dedicated Procurement and Climate module and 45% of buyers have been trained on how to “engage” suppliers on Climate topics.