Getting It Done Together – Steps on our path to climate neutrality
Covestro announced reduction targets for Scope 3 emissions on February 29, 2024. These make up around 80 percent of Covestro’s total emissions. The involvement of global suppliers plays a key role in achieving this. This is because these upstream and downstream emissions in the value chain account for around 80 percent of Covestro's total greenhouse gas emissions. In turn, more than 75 percent of this comes from raw materials, logistics services and product packaging that Covestro purchases.
On March 4, the Procurement Team led by Ferdinand Rammrath invited two virtual suppliers in order to illustrate their crucial role and and what Covestro now expects from its suppliers.
Markus Steilemann, CEO of Covestro, opened the event. He welcomed the international suppliers and positioned the scope 3 reduction targets within the vision of Covestro of becoming fully circular.
Covestro’s greatest opportunity to reduce Scope 3 emissions lies in reducing the Scope 1 and Scope 2 emissions of our suppliers. Most of Covestro’s raw material suppliers have already defined Scope 1 and Scope 2 targets themselves, which is important for Covestro.
Dear Ferdinand, are we under pressure to act or are the suppliers?
Ferdinand Rammrath: Quite clearly: both! We can only achieve climate neutrality together with all partners along the value chain. Suppliers are central to this. Our Scope 3 targets are the final piece of the puzzle in our climate neutrality strategy. We have already set ourselves ambitious targets for Scope 1 and 2. The same applies to many of our suppliers, who have committed to the transformation towards net zero. Just as we actively reduce our Scope 1 and 2 emissions through PPAs, i.e. direct supply contracts with energy suppliers, and energy efficiency measures, our suppliers also have a duty to achieve their own targets. After all, success here is very much in their hands. We also encourage our suppliers to actively work with their own upstream partners on ways to reduce emissions that are sustainable, especially in these economically challenging times. The emissions generated by our suppliers along their production chain are passed on to us as Scope 3 emissions.
How can we support our suppliers – and how can they support us?
Ferdinand Rammrath: We want the reduction of emissions in the value chain to be seen not only as a responsibility, but also as an opportunity for growth. We engage in transparent and open dialog with our suppliers in order to understand their environmental impact and find solutions together. This collaborative partnership enables us to tackle challenges together, reduce our environmental impact and build a more sustainable future. In the future, it will be important for our suppliers to stay in business - with Covestro and in the market!
How will Procurement and the Business Entities work together?
Ferdinand Rammrath: We have worked closely with the BEs to develop various measures aimed at achieving our sustainability goals. The close exchange between the BEs helps to secure and implement the solutions. Various measures are developed that are aimed at specific sustainability goals. The close exchange with the BEs helps to secure the solutions. It is also important to work closely with the BEs on the long-term development of the stores. For some projects, we have to decide years in advance so that we then have access to circular raw materials in good time - e.g. through our cooperation with Encina.
What happens now after the initial kick-off? What are the next steps?
Ferdinand Rammrath: Our supplier event is like the starting signal for a marathon: we were able to present our new goals in the strategic context of Covestro and specifically address opportunities and our expectations. We are now moving directly into concrete implementation with our individual suppliers. This means that we are holding individual discussions, evaluating offers and focusing full transparency as to how much emission reduction is possible with which measures. Our motto is: Highest value for lowest cost. We are now measuring our concrete quantitative progress in achieving our Scope 3 target. This will hopefully be visible in our emissions reporting very soon! However, the marathon will only be won when we reach our interim target in 2035 and are climate-neutral across the entire value chain by 2050.