The current climate situation
Acting on climate change has never been more important. In 2015, 196 parties adopted The Paris Agreement, aligning on trying to limit global warming to 1.5°C above pre-industrial levels. In 2018, the Intergovernmental Panel on Climate Change (IPCC) published a special report on the impact of global warming of 1.5°C, showing the importance of climate action and the need to keep warming to a maximum of 1.5°C. It has since then been re-confirmed in the release of the sixth assessment report. To achieve this goal, global greenhouse gas emissions need to halve every decade, reaching Net Zero by 2050.
In 2022, Ericsson set the long-term ambition to be Net Zero across our value chain by 2040. Aligning with a 1.5°C Science Based Target, a first major milestone by 2030 is to cut emissions by 50% in the supply chain and portfolio use, and to become Net Zero in our own activities.
Ericsson’s supplier climate target
Ericsson has set a supplier climate target for 350 high emitting and strategic suppliers to set their own 1.5°C aligned climate targets. This means that suppliers should halve absolute greenhouse gas emissions by 2030, and their commitment should be made public.
The suppliers in scope of Ericsson’s supplier climate action target will or have already received Ericsson’s supplier climate letter stating Ericsson’s expectations on suppliers for working with climate action signed by Head of Sourcing.
Guidelines on how to set a 1.5°C target
Suppliers are to set a public target in line with halving greenhouse gas emissions by 2030. For a target to be “public” the supplier can publish it on the supplier company webpage, annual report, or alike. The supplier can also choose to sign up to an organization such as Science Based Targets initiative (SBTi) or SME Climate Hub, however this is not a requirement from Ericsson. The progress for reaching the set climate target is also expected to be reported publicly by the supplier on an annual basis.
According to the GHG Protocol, emissions are divided into three scopes. Scope 1 emissions are direct emissions from the activities of an organization or under their control, such as direct energy combustion in facilities or company fleet vehicles. Scope 2 covers indirect emissions, for example purchased electricity. Scope 3 are indirect emissions from the rest of the company’s value chain. If not already done, the supplier should start by mapping out emissions for scope 1 and 2 and then also for scope 3.
When it comes to what emissions to look at, this will depend on the supplier and the supplier industry. As a rule of thumb, and as a first step, the target Ericsson expects suppliers to set should cover scope 1 and 2 emissions. However, depending on the supplier’s industry and if a big part of the emissions come from the rest of the value chain, parts of scope 3 may be relevant as well. To determine whether scopes 1, 2 and 3 should be applied, the supplier should refer to the SBTi criteria for 1.5-degree targets.
Further support & guidance:
- 1.5°C Business Playbook – A step by step guide for companies on how to align with the 1.5°C ambition.
- GHG Protocol – Provides the standard for companies on how to map out emissions.
- Science Based Targets initiative (SBTi) – Used to publicly announce 1.5°C aligned targets and has useful information for how to calculate targets. Often used by larger companies. Includes sector specific guidance.
- SME Climate Hub – Used to publicly announce 1.5°C aligned targets and has information and guides valuable for companies of all sizes. Often used by small and medium enterprises and is free of charge.
- 1.5 °C Supplier Engagement Guide – Provides practical guidance when working with suppliers to set and implement a 1.5°C aligned target.
- CDP – A database for reporting and collecting reports of emissions. Also has information for how to report and measure. Available in several languages.
Please also note that, in accordance with SBTi, the baseline of the target should be no more than two years back in order to be recognized as a 1.5°C target.
Collaborative approach
Ericsson has intentionally chosen a supplier climate target that can be used collaboratively. The supplier’s climate target should be publicly available and cover the whole supplier company, not only the Ericsson part of the business. This makes it possible for the supplier to use that same target as a reply to several customers.
Supporting this collaborative approach Ericsson is, together with Telia, BT Group, IKEA and Unilever, co-founder of the 1.5°C Supply Chain Leaders initiative. This initiative aims to align global supply chains around the common message to halve emissions by 2030 and become net zero by 2050.
Governance
Ericsson’s supplier climate action is driven by the Responsible Sourcing team within the Sourcing organization. Each sourcing supplier category has a climate coordinator that will coordinate and facilitate for the respective supplier category group areas. The result of the supplier climate target is reported via the circular economy and portfolio sustainability program governed by Ericsson´s Executive Team, as well as within the Sourcing organization.
Expanding climate action
For suppliers that already have a 1.5°C aligned target in place, it is encouraged to look at emissions in their full value chain and help spread the message of climate action further within their own supply chains. Ericsson recommends the 1.5 °C Supplier Engagement Guide when working with suppliers to take 1.5°C aligned climate action.
For large companies that are or will take extensive action in their full value chain, aligned with the 1.5°C ambition, participation in the 1.5°C Supply Chain Leaders initiative may be of interest.