Editing IPCC:AR6/WGIII/Chapter-11 (section)

==== 11.6.4.2 Private Procurement ====

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The number of companies producing sustainability reports has increased rapidly over the last decade ( [[#Jackson--2018|Jackson and Belkhir 2018]] ) and so has the number of pledges to carbon neutrality announced. This trend has mainly been driven by consumer concerns, investor requests, and as a business strategy to gain a competitive advantage ( [[#Higgins--2016|Higgins and Coffey 2016]] ; [[#Ibáñez-Forés--2016|Ibáñez-Forés et al. 2016]] ; [[#Koberg--2019|Koberg and Longoni 2019]] ). For example, Apple and the governments of Québec and Canada are the financier and lead market maker in the Elysis consortium to bring inert electrodes to market for bauxite smelting to make zero-GHG aluminium. Aluminium is a very small fraction of the cost of a laptop or smartphone, so even expensive low-emissions aluminium adds to Apple’s brand at very little cost per unit sold. Some countries are also requiring corporate to report their emissions. For example, the French government requires companies with 500 or more employees and financial institutions to report Corporate Social Responsibility (CSR) and disclose publicly Scope 1 (direct emissions), Scope 2 (indirect emissions from purchased electricity) and Scope 3 (emissions from supply chain impacts and consumer usage and end-of-life recycling practices) emissions ( [[#Mason--2016|Mason et al. 2016]] ).

The most common climate mitigation strategies used by corporates are to set emissions reduction targets in line with the Paris Agreement goals through science-based targets (SBTs) and to develop internal carbon pricing ( [[#Kuo--2021|Kuo and Chang 2021]] ). The SBT initiative records that 338 SBT companies reduced their emissions by 302 MtCO 2 -eq between 2015 and 2019 ( [[#SBTi--2021|SBTi 2021]] ). As of August 2021, 858 companies had set SBT and over 2000 companies across the world currently use internal carbon pricing with a median internal carbon price of USD25 per metric tonne of CO 2 -eq ( [[#Bartlett--2021|Bartlett et al. 2021]] ). The most determined companies have developed internal GHG abatement strategies that incorporate their supply chains’ emissions ( [[#Martí--2015|Martí et al. 2015]] ; [[#Gillingham--2017|Gillingham et al. 2017]] ; [[#Tost--2020|Tost et al. 2020]] ) and design procurement contracts that encourage or require their suppliers to also improve their product GHG footprint ( [[#Liu--2019a|Liu et al. 2019a]] ). For many corporations, the emissions impact within their supply chain far exceeds their operations direct emissions ( [[#CDP--2019|CDP 2019]] ). Therefore, the opportunities to reduce emissions through purchasing goods and services from the supply chain (Scope 3) have much greater potentials than from direct emissions.

However, these trends have to be approached with caution as some of the emissions reductions are not direct emissions reductions from companies’ operations, instead often from offset projects of varying quality ( [[#Chrobak--2021|Chrobak 2021]] ). There is a lack of consistency and comparability in the way firms are reporting emissions, which limits the possibilities to assess companies’ actual ambition and progress ( [[#Sullivan--2012|Sullivan and Gouldson 2012]] ; [[#Burritt--2014|Burritt and Schaltegger 2014]] ; [[#Liu--2015|Liu et al. 2015]] ; [[#Rietbergen--2015|Rietbergen et al. 2015]] ; Blanco et al. 2016). More research is needed to assess the current impacts of corporate voluntary climate actions and if these efforts meet the Paris Agreement’s goals ( [[#Rietbergen--2015|Rietbergen et al. 2015]] ; [[#Wang--2018|Wang and Sueyoshi 2018]] ). It will be critically important that the international corporate accounting frameworks, standards, and related guidance (e.g., GHG Protocol) be maintained and improved to reflect evolving needs in the global market and to allow for comparison of objectives and progress.

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