According to a new analysis from HSBC and Boston Consulting Group (BCG), supply chains would need to invest up to $100 trillion to achieve net-zero emissions by 2050. Supply chains are responsible for 80% of global carbon emissions.
While different organisations and enterprises race to declare net-zero emissions across their operations, they have not done enough to address indirect emissions from their suppliers, which will require $100 trillion, according to them. Small and medium-sized businesses will require between $25 trillion and $50 trillion in funding (SMEs).
The research offers a seven-pillar transition map that includes steps to rethink product design, embrace collaboration, build the capabilities needed for change, invest in climate tech, develop better data structures, think about policy and standards holistically, and enable financing.
Commenting, Global Head of Trade and Receivables Finance at HSBC, Natalie Blyth, said: “Despite the positivity of increasing numbers of large corporates making net zero commitments, the reality is that delivering on ‘Scope 3’ [supply chain] emissions will be extremely challenging unless urgent action to support SMEs is taken now.”
Excerpt from the report: “The challenge is not only a matter of cost or technology. It involves changes in business models and organizational culture. SMEs need incentives to move toward a smaller carbon footprint, resources to cover the costs, training to make it work, the technological platforms to help them overcome hurdles.”
“We understand more and more about the ‘why’ and ‘how’ of enabling net zero supply chains. But we cannot afford to lose sight of the third critical factor: the ‘when’. The pace of change is incredibly important, and the data clearly shows that the answer is ‘now.”