5 minutes with Amanda Wood at BAE Systems on tackling Scope 3 emissions

posted by Amanda Wood
12 September 2022

Amanda Wood, sustainability director for supply chain at BAE Systems, speaks with Supply Management about practical steps for reducing Scope 3 emissions throughout your supply chain. 


Amanda, can you tell us about BAE Systems' recent work in regards to sustainability – what has been achieved so far and of what's to come?

Well, we now have a path to fully understanding our global supply chain emissions at tier one level – that is all of the suppliers we directly contract with across our four key markets: the US, the UK, Australia, and Saudi Arabia. That data baseline is your gateway into planning your approach around supply decarbonisation. We have also set Scope 1 and 2 science-based targets within our own operations in order to achieve our target to be carbon net zero by 2030, and to work towards being carbon net zero by 2050 for our supply chain.

Many businesses are struggling with the cost of doing business right now and it begs the question: why make investments at this point when you're struggling to cover basic costs. What's your opinion on the relationship between sustainability and the cost of doing business?

I absolutely believe that sustainability can be a differentiator. It doesn't necessarily have to be just a cost. Sustainability can help you with competitive advantage, for example, so this is about purpose, about doing the right thing, about having a positive impact. But equally, it has to be about business performance as well – I don't think the two things are mutually exclusive.

Is that different in those different markets or are you applying one initiative across the board?

As an enterprise we have signed up to the UN’s Race to Zero initiative, that's specifically in the environment space. But what we see across our key markets is there are different drivers, different priorities and different constraints. So, while we absolutely desire to have that global strategy for our supply chain – which we will – that will be tailored to each region. For example in Australia, there is a big focus on industrialisation while in the US it’s social value and diversity, and in the UK, with recent legislation and commitments around climate change, there's a big focus in the environment space. That's not to mean there's no work being done on other places, but you see it varies based on legislation, priorities, and equally on what's going to bring a company competitive advantage.

I don't think there is a one size fits all solution. For me, the secret for success is about making sure that what you choose to work on is relevant for your market, relevant for your business, your industry, and that it adds value where you need it to because that's how you will then create the movement and be successful.

And what about smaller businesses or smaller procurement teams? Is it achievable for them?

Absolutely. We recognise that we have to be and should be a responsible corporate citizen. We have a vast and complex supply chain where we spend about £10.5bn a year with about 20,000 suppliers. Those supplier businesses are all shapes and sizes. Some will already be on this journey, or in fact, ahead of us and we will learn from that. But others will need some support to get on the journey either because they're small and they might not have the right SQEP nor the right financial backing for example. We have a responsibility to play a supply development role, if you will, and work with those suppliers for collective gain. I don't sign up to just rolling out requirements. This is about an individual approach with our suppliers based on where they're at and how we can help.

What’s been the one golden lesson that’s been central to BAE's journey?

Collaboration for me is the absolute key – collaboration with all of your stakeholders, across all of the different internal functions, external with customers, with suppliers, with investor groups. And join up where you can, co-create solutions, you can form the movement and go on this journey together. I think acting in isolation on sustainability is not the best approach because we’re all in this together. And when we're dealing with suppliers, we need to recognise that. When working in that sustainability space, it's not a traditional relationship, it has to be a partnership to be successful.

Is there anything else we should know?

We tend to think about supplier performance in a triangle of time, cost and quality. But there’s a lot of thought leadership around making that triangle a square, whereby sustainability considerations are equally as important as time cost and quality. Also, we have a document called Supply principles – guidance for responsible business, that’s another term for our supply code of conduct, it sets out our expectations with regards to ethical business conduct, how we expect our supply chain to operate and ensures we only work with suppliers that share our values and standards of operation.

Just a couple of months ago we updated, refreshed and reissued that document. And for the first time we have published our sustainability ambitions for our supply chain in that document. It consisted of two parts: to strengthen the document in terms of updated regulation and compliance expectations; and secondly to introduce our supply chain ambitions to our suppliers as a warm up to ‘we’re going on this journey and we want you to come with us’.

How much difference is there between developing a policy and making a public statement?

It does make a difference, it's almost like you put a stake in the ground with your expectations of suppliers. Because we can make public statements but you need to live by them. For example, with the supply principles we've issued we are now conducting assurance and gap analysis with our supply base against those, so testing our suppliers’ adoption of those principles if you will, identifying risks and working with those suppliers if there are risks we can help to mitigate. It's not just about making a statement and putting a document out there. It's about doing something with it. There's always a focus on identifying the risk, and then sometimes the focus goes away, but the true benefit comes from actually doing something with that insight.

And finally, you will be speaking at the upcoming Procurement Futures event. Can you give us a little taste of what you will focus on?

Sure, I will be talking about supply chain sustainability, specifically around Scope 3, so will discuss our value chain and the importance of engaging and collaborating with our suppliers right at the beginning of the journey, to co-create those solutions around decarbonisation. And then I’ll cover a little bit about the journey that we've been on at BAE Systems, to understand our global supplier emissions baseline, and what we plan to do next, in terms of preparing our science- based targets and how we plan to work with our suppliers for mutual benefit.

 


Procurement Futures, by CIPS, is taking place in February 2023. You can find more information at: procurementfutures.com.

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