Dear Delhaize Suppliers,

Recently, Delhaize communicated its ambitious climate goals and the urgent need for collaboration across its supply chain to mitigate environmental impact. (For reference, you can find the email that’s been sent out by Delhaize towards its suppliers at the end of this article.) Understanding and complying with these requirements is crucial not only for meeting regulatory obligations and Delhaize’s specific requirements for you as a supplier, but also for contributing to a sustainable future.

Below is a comprehensive guide to help you begin providing the correct sustainability information to your customers.

Breaking Down the Terminology-

SBTi (Science Based Targets initiative):The Science Based Targets initiative (SBTi) is a global body that empowers businesses to set ambitious emissions reduction targets that align with the latest climate science. This initiative is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF).

What’s the Goal of SBTi?SBTi’s primary objective is to limit global warming to well below 2°C above pre-industrial levels, with a concerted effort to cap it at 1.5°C. By setting these science-based targets, companies commit to reducing their greenhouse gas (GHG) emissions in line with what climate science deems necessary to meet the goals of the Paris Agreement. This ensures that business practices are not only sustainable but also resilient against future climate-related disruptions.SBTi provides a framework towards companies that have set targets, with certain expectations to meet. For example: according to SBTi criteria, if a company's scope 3 emissions represent over 40% of their total scope 1, 2, and 3 emissions, they must set supplier engagement or reduction targets that cover at least 67% of total scope 3 emissions, and thus collaborate intensively with their suppliers.

CSRD (Corporate Sustainability Reporting Directive):The Corporate Sustainability Reporting Directive (CSRD) is a comprehensive EU regulation designed to standardize and enhance sustainability reporting across all significant companies operating within the European Union.

What’s the Goal of the CSRD?Approved by the European Parliament on November 10, 2022, the CSRD aims to ensure consistent, reliable, and transparent sustainability data for stakeholders like investors, consumers, and regulators. It replaces the Non-Financial Reporting Directive (NFRD) with more stringent ESG reporting requirements. The goal is to push companies towards sustainable practices, supporting the EU's goal of a net-zero economy. By mandating detailed ESG reporting, the CSRD enhances corporate accountability and encourages action to reduce environmental and social impacts.

Which Companies Are Eligible?

Both SBTi and CSRD apply to a wide range of companies, driving a comprehensive approach to sustainability.

SBTi:The SBTi is a voluntary initiative. Companies are not obliged to commit their targets to SBTi, however any company looking to demonstrate leadership in climate action can participate in the SBTi. This includes large corporations, small and medium-sized enterprises (SMEs), and even financial institutions. The initiative provides specific guidelines and pathways for different types of organizations to set and achieve their targets. For SMEs, the SBTi offers a streamlined route to set and meet targets without the complexity often associated with larger corporations' sustainability processes. This makes it accessible for businesses of all sizes to commit to meaningful climate action.

CSRD:The CSRD applies to all large companies operating within the EU, including those with a turnover exceeding €150 million. This includes EU-based companies as well as non-EU companies with significant business operations within the EU. Companies are required to follow the European Reporting Standards (ERS), which provide a consistent framework for reporting ESG data. These standards are designed to ensure that sustainability information is comparable, reliable, and easy to understand for stakeholders.

More information about CSRD and its elegibility criteria can be found here.

Impact for Suppliers of Eligible Companies:

For suppliers, aligning with companies that have SBTi-approved targets or are subject to CSRD regulations means engaging in rigorous sustainability practices. Suppliers are often required to measure, report, and reduce their own emissions to meet the standards set by their partners. This can involve setting their own science-based targets, improving energy efficiency, and adopting cleaner technologies. By doing so, suppliers not only contribute to global climate goals but also enhance their competitiveness and resilience in a market that increasingly values sustainability.

Working with SBTi-aligned companies or those complying with CSRD can provide suppliers with access to new markets and opportunities, as sustainability becomes a key criterion for business partnerships. Additionally, suppliers who demonstrate leadership in sustainability are better positioned to meet future regulatory requirements and customer expectations. Providing detailed ESG data can enhance a supplier’s reputation, attract new customers, and potentially secure better terms in business contracts.

Both the SBTi and CSRD are pivotal in shaping a sustainable future. They push companies to take substantial steps towards reducing their environmental impact and improving their social governance. For suppliers, understanding and aligning with these frameworks is crucial. It not only ensures compliance and strengthens business relationships but also enhances overall sustainability and resilience in an increasingly eco-conscious market. Connect with us today, and let’s get ready for the upcoming sustainability deadlines together.

Understanding Scope 1, 2, and 3 Emissions-

• Scope 1 & 2 Emissions: These include direct emissions from owned or controlled sources (Scope 1) and indirect emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the reporting company (Scope 2).
• Scope 3 Emissions: Indirect emissions from the value chain activities of an organization, including both upstream and downstream emissions such as purchased goods and services, business travel, and waste disposal. Scope 3 emissions are often the largest contributor to a company's carbon footprint, sometimes exceeding 85% depending on the industry, even though they are not directly controlled by the organisation.Since Scope 3 is the biggest portion of a company’s CO2 footprint, it requires the most effort in collecting the neccessary data to calculate it, and afterwards also working together in the supply chain towards reduction.

Prepare Your Sustainability Data for Delhaize.

Carbon Footprint Reporting (by September 18th, 2024):

• Submit data on your Scopes 1, 2 & 3 emissions along with your plans for reduction.
• This is an annually reccuring process, so you'll report on your 2023 footprint and progress in 2024.

Climate Targets (by June 30th, 2025):

• Set science-based targets for reducing your carbon footprint.
• Targets should be validated by an external body (SBTi or equivalent) and aligned with limiting global warming to 1.5°C.
• Include separate targets for both your own operations (Scopes 1 & 2) and emissions in your supply chain related to Delhaize products (Scope 3).
• Small and Medium-sized Enterprises (SMEs) can utilize the SBTi's simplified process.

Reporting Platform Selection:

• You can choose between two options:
  • Carbon Disclosure Project (CDP): A more comprehensive platform. Ensure you link your emissions data to Ahold Delhaize for proper recognition.
  • ImpactBuying: A simpler online survey specifically designed for supplier sustainability reporting.

Steps you need to take in order to provide the correct information to Delhaize.

Calculating your Scope 1, 2 and 3 emissions is the first step, to afterwards work towards reduction targets for each of the 3 Scopes.

Scope 1 and 2 are straightforward to calculate and can be calculated using internal data.

Scope 1: Measure direct emissions from fuel consumption in stationary sources, company vehicles, processes, and leaks, then apply the appropriate emission factors.

Scope 2: Track electricity, steam, heating, and cooling energy consumption, and multiply by their respective emission factors.

Scope 3: Requires more time and resource investment in order to calculate correctly and set you up for succes towards reduction targets in the future.

Typically companies start with using spend-based or activity-based data to have an initial understanding of their Scope 3 emissions. Later on, they further enhance the data by collecting supplier-specific information in order to have a clear view on the status of their supply chain and the actions needed to reduce Scope 3 in the near future.

Below we outline the actions to take when choosing to use the supplier-specific method (which is the most complete and future-proof method):

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1. Scope 3 screening

In order to have an initial view on which products and suppliers will have the biggest impact on your Scope 3, you conduct a ‘Hotspot Analysis’. This analysis shows you the relative impact certain product groups and suppliers have on your total Scope 3 CO2 emissions. Based on this analysis, you are now able to devide your suppliers in an impact matrix to decide which level of collaboration you need.

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1. Maturity assesment.

A second step in assessing your suppliers is to have a view on their sustainability maturity: did your supplier already calculate their organisational footprint? Have they set reduction targets? Did they achieve certain labels or ratings? … All this information gives you a better view on how mature your supplier is on the topic, and thus how easy it will be to collaborate with them towards your reduction targets.

1. Collect supplier specific data.

Once you’ve identified the group of suppliers that you want to actively engage with to collect their sustainability data, time has come to engage with them at scale. Doing so comes with challenges. You have to walk through the steps below in order to collect the data points you need from your value chain (organisational footprint; Product Carbon Footprint; Targets; …).

1. Compare to benchmarks.

Once you have collected Supplier Specific data, its time to cross-check this against the industry, in order to identify how your value chain performs and where you could improve your CO2 footprint by e.g. procuring more sustainable alternatives.

1. Scope 3 forecasting.

Delhaize asks you to set Targets by June 2025. This means that you’ll have to create an action plan based on the current situation and forecast where you’ll stand in the near future thanks to actions that your suppliers take. That’s where Scope 3 forecasting comes in to play. Based on the information about your supplier’s own targets and reduction initiatives, combined with actions you will take yourself as a company, you try to as accurately as possible predict which Targets are reachable and how you’ll reach them in the coming years.

Let's Connect and Get Ready.

With the September deadline approaching, it's crucial to prepare your sustainability data effectively. Here's how ClimateCamp can assist you in this process:

Calculating Scope 3 Emissions: Engage directly with your suppliers to gather comprehensive data on upstream emissions related to the products supplied to Delhaize. This involves collaborating closely with suppliers to ensure accurate and complete reporting.

Collect and calculate Scope 1, 2 and 3 data on a recurring basis.

Reporting via CDP or ImpactBuying:

• Carbon Disclosure Project (CDP): You don't need to manage the CDP platform yourself. ClimateCamp integrates your emissions data with Ahold Delhaize's requirements seamlessly.
• ImpactBuying: Simplify your reporting process with this platform. ClimateCamp integrates with ImpactBuying to facilitate efficient and straightforward online survey-based reporting.

Target setting and Scope 3 forecasting.

Connect with Us:

Let’s collaborate to ensure your readiness for the September 2024 reporting deadline. We’re happy to advice you on your specific situation during a quick video call. Feel free to book a slot via this link.

Join our upcoming webinar on Wednesday, July 31st at 8:30 AM. We’ll cover all the essential topics including calculating emissions, setting targets, developing reduction strategies, and navigating reporting platforms. Don’t miss out on this informative session!

Delhaize email towards suppliers:

Sincerely,

ClimateCamp Team

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