At a Glance
Financial Services and Insurance
Goals/Targets, Supply Chain
In support of its operational sustainability program, Citizens engaged Climate Corps fellow Nidhi Nair to assess supply chain emissions and develop a comprehensive supplier engagement strategy.
Given the increasing focus on Scope 3 greenhouse gas emissions, Citizens was interested in understanding the climate impact of its upstream supply chain, presumed to be one of the most material categories of operational emissions. They tasked EDFCC Fellow Nidhi Nair with estimating the greenhouse gas emissions from their procurement activities and then using this analysis to develop a supplier engagement strategy that built on Citizens’ Supplier Code of Conduct.
This strategy will expand and deepen engagement with Citizens’ vendors with the goal of identifying supply chain ESG risks and opportunities for partnering with vendors to increase sustainability impact and decrease carbon emissions.
- Benchmarked Citizens’ Supplier Code of Conduct and supply chain program against peers to understand the regional and national competitive landscape and to identify top performers. Nidhi then interviewed top performing peers to understand how they built, scaled, and resourced supplier engagement programs.
- Estimated emissions from suppliers using Greenhouse Gas Protocol aligned spend-based methodology and U.S. EPA industry specific emissions factors to identify hotspots in Citizens’ supply chain. Nidhi identified top industries that contributed 75% of Citizens’ total estimated emissions from purchased goods and services.
- Isolated target cohort of vendors corresponding to 35% of Citizens’ spend for Phase 1 of supplier engagement program. Developed engagement targets to achieve emissions reductions in alignment with SBTi guidance and outlined a pathway to achievement.
- Recommended key tools and incentives that could be used to motivate vendor participation and support their sustainability progress.
Implementing a supply chain program is the first step in tackling Citizens’ upstream supply chain emissions. According to CDP, a company’s supply chain emissions can be 7x a firm’s operational emissions (Scope 1 and 2). Actively addressing the climate impacts from purchased goods and services can help Citizens’ remain resilient as the world transitions to a low carbon economy and stimulates systems change by encouraging vendors to lower their emissions.
Engaging with Phase 1 vendors puts Citizens on the path to addressing emissions from 35% of its procurement spend. This work will continue to inform responsible sourcing practices that consider climate and other sustainability impacts. It also creates opportunities for synergies between Citizens’ supplier engagement and client engagement work as part of the company’s broader sustainability strategy.