Collecting data and reducing Scope 3 emissions are some of the biggest challenges that businesses are facing when implementing their net zero strategies. Key pain points are the lack of carbon data from suppliers and lack of buyer-supplier collaboration on emissions reduction measures. Here, we’ve profiled an organization that has taken steps forward in engaging its suppliers to reduce its Scope 3 emissions and achieve net zero targets.
Who:
LEGO Group, a Denmark-based multinational toy manufacturer with £9.5 billion in revenue (FY 2023) and over 25,000 employees.
What particular challenges do they face?
99% of LEGO Group’s GHG emissions are classified as Scope 3 and come from raw materials, machines, products and services. Given that the vast majority of its emissions lie outside its own operations, the main decarbonization challenge for LEGO Group is lack of supplier commitment to net zero.
What did they do?
In 2023, LEGO Group pledged to reach net zero by 2050 – with 37% reduction by 2032 – and announced an investment of $1.4 billion to reduce emissions.
How will they do it?
To achieve this goal, the LEGO Group launched its Supplier Sustainability Programme. Key actions for suppliers include:
- Providing carbon data associated with LEGO Group’s products. Sharing carbon footprint reports with LEGO Group on an annual basis, starting in 2024. LEGO Group will provide initial support with carbon accounting.
- Demonstrating near-term emissions reduction targets for products sold to LEGO Group by 2026.
- Collaborating with LEGO Group to identify initiatives for suppliers to support LEGO Group’s reduction goals (such as transition to renewable energy sources and decarbonization of its fleet).
The announcement followed LEGO Group’s decision to tie employees’ bonuses to emissions reduction goals, based on KPIs including Scope 3 business travel emissions.
Where you can find out more:
To read more about the initiative, see LEGO Group’s announcement and sustainability progress report. To find out more about how software solutions can support with supplier engagement and supply chain emissions data management, calculation and analysis, read Verdantix Smart Innovators: Supply Chain Carbon Management.
