Executive Summary
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Supplier engagement is the cornerstone of credible decarbonization because most emissions sit in the value chain—not in a company’s own operations. Successful programs start with clear, realistic objectives that distinguish between data collection, data accuracy, compliance alignment, and actual emissions reduction
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Companies should prioritize a small set of high-impact suppliers first—those with material emissions, reliable data, access to upstream hotspots, and genuine ability or willingness to decarbonise—while building broader supplier capacity over time.
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A structured, two-horizon approach works best: short-term focus on capable, strategic suppliers to build early wins; long-term expansion to prepare the wider base and enable scalable emissions reductions.
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Engagement must be anchored in shared value for suppliers, including capacity-building, transparent insights, certifications or labelling benefits, preferential terms, and collaboration on low-carbon products — shifting climate action from a compliance burden to a commercial opportunity.
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Ultimately, supplier engagement succeeds when it is clear, sequenced, and mutually valuable. Terrascope helps companies operationalise this by making supplier participation easier, data collection more accurate, and engagement more scalable across the value chain.
Introduction
When companies begin their decarbonization journey, most quickly realise that the majority of their emissions lie beyond their own operations — in their supply chain.
This article focuses on one core question: How do you get started with supplier engagement and choose the suppliers that truly matter for climate impact? Below, we go deeper into the first three steps we recommend clients starting their supplier engagement journey.
I. Start with clear and realistic objectives
““Supplier engagement” is a catch-all term, often used without agreement on what it actually entails. Thus, I advise clients to start their supplier engagement journey by clarifying what success should look like for them in the next 12 to 24 months, and separately setting a longer term ambition for the next five to ten years. Without this clarity, supplier programmes risk becoming scattered and exhausting goodwill with suppliers.
Below are some examples of objectives. These are not mutually exclusive, but they cannot all be pursued at the same intensity at the same time. In many cases, they come in sequence.
- Build supplier awareness and climate literacy
- Improve accuracy of upstream Scope 3.1 emissions
- Align with voluntary climate standards and regulations
- Drive systemic change
Clear priorities on objective help teams focus, sequence their efforts, and design engagement strategies that are realistic and effective.
II. Prioritise the Right Suppliers and Build Capacity Over Time
Many companies try to engage as many suppliers as possible, but broad, unfocused outreach rarely delivers meaningful results. To make real decarbonisation progress, I find it helpful to think in two time horizons.
- In the short term, you may gain more by starting with a smaller group of capable and material suppliers who can help you test ideas, pilot processes and build early learnings that you can later share with a wider group.
- Over the longer term, likely you will eventually need to expand engagement to a broader supplier base to reach your decarbonisation target. Your task for now is to make sure you are doing the right things to prepare that wider group so they are ready to engage meaningfully when the time comes.
A practical way to set short-term priorities is to assess suppliers that can fulfill the criteria below.
In reality, few suppliers will meet all the criteria from day one. Some may not be ready or willing to engage yet. This is where strategy and long-term planning matter. Consider how you can help them build capability over the next few years. Start with practical entry points by working with more willing and capable partners. Incremental progress will help you build a stronger, more inclusive programme over time.
III. Tailor Engagement Strategies by Creating Shared Value
Even the best-designed strategy will fail if suppliers don’t see the value in participating. I often tell clients that supplier engagement is really about reframing the conversation. When suppliers see commercial upside — or even reduced risk — they are far more likely to participate and stay committed over time.
To bring suppliers meaningfully into the programme, it’s important to create shared value. This can take many forms —
- Capacity-building and knowledge transfer. Help suppliers build climate literacy, systems and confidence. Be transparent with outcomes: if suppliers provide data, share back the results, insights and implications.
- Credible certifications or climate labelling.
- Preferential relationships for climate-progressive suppliers. This could include better contractual terms, preferred supplier status, or for retailers, more prominent shelf space and marketing support.
- Collaboration on low-carbon product development. Co-funding or co-developing lower-emission products can reduce commercial risk for suppliers and improve their access to capital.
- Buyer associations or collective action platforms. These groups can create industry-wide momentum by setting common expectations and streamlining data requirements.
The buyer’s role is to facilitate and enable, but the ownership of emissions reduction ultimately rests with suppliers. This is what ensures the credibility and long-term sustainability of any supplier engagement programme. At its core, supplier engagement is not about offloading responsibility. It is about empowering partners who want to decarbonise and creating the conditions for them to succeed. When engagement is anchored in mutual value, you build relationships that lead to lasting insights and real impact.
IV. Conclusion
Moving from intent to impact on supplier engagement requires three foundational steps: defining clear objectives, prioritizing strategically, and creating shared value. Start by clarifying what success looks like in both the near term and over the next five to ten years. Next, resist the urge to engage broadly from day one. Focus on a small set of high-impact, capable suppliers who can help you build early wins and pilot processes. Finally, remember that supplier engagement succeeds when suppliers see value in participating—whether through capacity-building, preferential terms, certifications, or co-development opportunities. Climate action becomes credible when it shifts from a compliance burden to a commercial opportunity.
At Terrascope, we help companies operationalize this journey by making supplier participation easier, data collection more accurate, and engagement more scalable across the value chain. Whether you're navigating new regulations like the Land Sector Removals Guidance (LSRG) or building your first supplier program from scratch, the path forward starts with being clear, focused, and mutually valuable.
