Incentives for supply chain decarbonization

To reach net-zero, Scope 3 supply chain emissions must be addressed by businesses globally. Decarbonization within the supply chain plays a critical role in realizing net-zero ambitions, and multinationals are in a unique position to influence supplier behaviors, operations and investments through incentives. However, the combination of competing business priorities with supply chain complexity has led many organizations to stall or delay action in this space.

In response to this challenge, the WBCSD cross value chain project “SOS 1.5” that facilitates collaboration to accelerate and unlock decarbonization solutions, initiated an Incentivizing Supply Chain Decarbonization working group. Drawing on the consultation of 11 multinational businesses from this working group, WBCSD and PwC are pleased to share their findings in a new report bringing structure to this complex topic. This report presents a framework of supplier incentivization levers that companies can use to decarbonize their supply chains, ranging from penalty-based to reward-based levers. The framework is supported by case studies of how companies are already using these to catalyze climate action within their supply chains, as well as concrete steps companies can take to incentivize supply chain decarbonization.