Why highlight the supply chain? Because that’s where most emissions—and most opportunities for change—reside: in procurement choices, freight decisions, and packaging. More and more companies are stepping up, showing real innovation and commitment to supply chain decarbonization.
At Schneider Electric, we’re proud to have contributed to the Rocky Mountain Institute’s (RMI) new guide on Supply Chain Decarbonization. The guide highlights a key insight: real progress happens when sustainability and procurement teams work together. Sustainability teams bring the vision and targets; procurement teams shape demand and send market signals through everyday decisions. Aligning these functions is essential to unlocking scalable, practical solutions.
It offers a hands-on framework to build internal momentum, overcome data challenges, engage suppliers, and make smarter, more sustainable procurement decisions.
Key actions to drive supply chain decarbonization
1. Strong leadership
Tangible emissions reduction depends on strong internal alignment since many internal and external teams have to work collaboratively. Achieving this starts at the top, with senior leadership buy-in and a clear governance structure. Leadership sets the direction with relevant allocation of resources, while an effective governance structure ensures that decarbonization efforts are integrated across all business functions.
- To sustain this momentum, companies can embed climate KPIs across business functions, create internal incentives to drive engagement, and even use carbon pricing to integrate climate factors into decision-making.
- Working collaboratively with all the stakeholders, including finance, procurement, sustainability, IT, and others, towards shared sustainability outcomes is central to realizing reductions.
- As an example, at Schneider, three interconnected mechanisms drive our upstream Scope 3 reductions: Science-Based Targets initiative (SBTi) with absolute reduction targets, internal long-term incentives tied to upstream emissions, and an external sustainability KPI.
2. Tackling data and reporting challenges
Moving from disclosure to reduction requires navigating a complex world of GHG standards and methodologies. The goal is to simplify reporting and clarify uncertainties in the data. By understanding the methodological differences required for various reporting and streamlining efforts across teams, more time can be spent focused on actions to drive reductions. Being clear with asks to suppliers and getting clarity on the nature of what data is returned is key to effectively using the data.
3. Engaging suppliers
Once you have internal momentum and data clarity, the next step is to engage suppliers effectively and make smart purchasing decisions that drive decarbonization. Not all suppliers are the same. Companies should segment them into groups based on their climate maturity and emissions impact. For companies with high emissions impact and high sustainability maturity, there may be opportunities for deeper partnerships and boundary-pushing initiatives to achieve impact together. For lower-impact suppliers with low maturity, lower-touch engagements may be best suited. Segmentation is foundational to this work, and it is something that is refined over time as supplier maturity evolves.
4. Taking sustainable procurement decisions
Procurement teams have a powerful lever to drive change by making different purchasing choices. To ensure the purchases are, in fact, lower emissions, having some validation of that claim is important. For known low-emissions technologies, accessing these technologies is not always so easy, but through group purchases, long-term agreements, or direct investments, more opportunities may be made available. To fund these low-emissions options, an internal carbon price or shadow price can inform procurement decisions.
Schneider’s collaborative approach
At Schneider Electric, we firmly believe in the power of collaboration to drive decarbonization. Due to their complexity, Scope 3 emissions can only be effectively reduced through joint efforts with suppliers, customers, and other stakeholders in the value chain—requiring a shared commitment and innovative approach for their success.
We realized this early on, and in 2021, we launched The Zero Carbon Project—a collaborative effort between us and our top 1,000 suppliers to tackle supply chain decarbonization. These suppliers make up 65% of GHG emissions from purchased goods & services. We provide them access to tools, training, expert advice, and implementation support to quantify their operational GHG emission (scope 1 & 2), set ambitious reduction targets, and develop and deploy roadmaps to achieve them. We also facilitate the sharing of best practices within our supplier community to accelerate progress.
Through this program, we’re not only working towards our own sustainability commitment but multiplying our impact—suppliers feel encouraged and supported to do the same across their own ecosystems with their own suppliers and partners. Since the program’s launch, we have achieved a 53% average reduction in operational emission intensity as of September 2025.
If you want to take a deeper dive into the guide, including real-world use cases from different companies, you can read more about it on RMI.
This blog post is a summary and adaptation of the research paper titled “Accelerating Supply Chain Decarbonization” by Wenjuan Liu, Iris Wu, Hao Wu, and Hylla Barbosa. The original work is licensed under a Creative Commons CC BY-SA 4.0 license.
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