We’re using our scale and influence to boost sustainability, drive innovation, and help our partners achieve their own sustainability goals.
As part of these efforts, we completed a scoping assessment to identify and estimate all relevant Scope 3 emissions categories to use as our baseline for future emissions reduction initiatives. This helped us pinpoint the most significant areas to focus our efforts.
Within Scope 3, category 1 ‘purchased goods and services’ and category 11 ‘use of sold products’ account for over 90% of our emissions (see Table 3 & Figure 3). These emissions are directly linked to the products and services we sell to our partners.
Using this information, we set targets to address these major categories and developed our plan to engage with our supply chain to reduce emissions.
Scope 3: Deep dive
This year, our overall Scope 3 emissions increased by 17% from FY22 to FY23. This is due to business growth: our revenue increased by 18.3% from US $2.89 billion in FY22 to US $3.42 billion in FY23. Since we currently use a spend-based emissions calculations methodology, an increase is reflected in the figures.
The largest absolute emissions increases were in ‘purchased services and goods’ (94,938 tCO2e), ‘use of sold products’ (14,841 tCO2e), and ‘end of life treatment of sold products’ (3,950 tCO2e). We’ve since made these categories a top priority for emissions reductions initiatives.
Table 3. Scope 3 emissions by category: FY23 vs FY22
For FY23 Scope 3 calculations, we prioritised the following categories: ‘purchased goods and services’, ‘business travel’ and ‘use of sold products’ for data collection. The other categories were estimated by applying an uplift to FY22 data based on financial data. Please note, this data hasn’t been externally assured.
Supplier risk assessment
In FY23, we performed a desk-based supplier risk assessment of our 14 largest vendors, establishing a framework to track their progress over time. This framework will guide our vendor engagement strategy, helping us prioritise which vendors to work with and on which topics.
Currently, we’re converting the framework into a self-assessment format, extending its coverage to include labour and human rights topics. We’re looking to roll this out in FY24.
Reaching our supplier engagement target 2025 commitment In FY23, we performed a desk-based supplier risk assessment of our 14 largest vendors, establishing a framework to track their progress over time. This framework will guide our vendor engagement strategy, helping us prioritise which vendors to work with and on which topics.
Currently, we’re converting the framework into a self-assessment format, extending its coverage to include labour and human rights topics. We’re looking to roll this out in FY24.
We set a target to ensure 80% of our suppliers (as defined by spend, covering purchased goods and services and the use of sold products) have set science-based targets by 2025.
In FY23, 54.5% of our suppliers had committed to set targets.
We’re working closely with these vendors to understand their future plans and how they’ll achieve their targets once set. We’re also working to encourage more of our vendors to make this commitment.
Reaching our Scope 3 2030 commitment
To reach our goal of reducing Scope 3 emissions by 25% by FY30, we’ll need to shift from a spend-based methodology to using product-specific data in our calculations.
The steps we plan to take are:
Step 1
Get more granular spend-based data, including specific spend-based emissions factors for a wider range of product categories. This will involve collaborating with vendors and an internal project to better categorise product stock-keeping units
Step 2
Move away from spend-based calculations to product-based calculations using generic product-based emissions factors where possible (and only using spend-based calculations when needed)
Step 3
Start gathering emissions data from suppliers through ongoing engagement. We will use either extrapolation, product-based, or spend-based calculations to supplement exclusions
Step 3 will require continuous improvement over time, and we have already begun on this journey.
Because of the uncertainties linked to spend-based methodologies, we’ll review the impact of any methodological changes annually. If necessary, we’ll even recalculate or restate our base year.
