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Sustainability in the supply chain

Blog • April 18, 2024


The previous two blog posts in this series have discussed how we as Flex Power Modules are reducing Scope 1 and Scope 2 GHG emissions through a variety of initiatives in Production and R&D. In this post we focus on the challenges involved in measuring and, ultimately, reducing Scope 3 emissions and describe how Flex is leveraging our position as an industry leader to drive down emissions in our global supply chain.

The challenge of measuring Scope 3 emissions

As highlighted in a previous post in this series, Scope 3 emissions usually significantly exceed Scope 1 and 2 emissions, accounting for 77% of total emissions, on average, across the electronics sector. These emissions are difficult to measure, however, let alone control, and most companies are only at the beginning of their journey with Scope 3 emissions.

This picture is set to change, however, as regulators around the world seek to close the current gap in carbon accounting caused by the inconsistencies in Scope 3 disclosures. In Europe, the Corporate Sustainability Reporting Directive (CSRD) will require organizations to report on their emissions across the whole value chain starting from 2025. In the USA, current proposed changes to the EPA’s GHGRP (GHG Reporting Program) will likely require Scope 3 disclosure from in-scope organizations and regulators in South-East Asian countries are also increasing their focus on Scope 3 disclosure.

Organizations therefore need to gear up for this additional reporting requirement and, while many leading companies, such as Flex, have already put the resources, systems and processes in place, most others still have work to do. In the UK, for example, a recent poll of companies concluded that, while 96% were aware of the CSRD, only 40% were currently likely to be ready to comply within the 2025 deadline.

Accounting for Scope 3 Emissions

Several organizations exist, offering guidance, support, and standards to organizations seeking to implement leading practice carbon accounting processes.

The CDP is an international nonprofit organization set up to help companies and cities meet their carbon disclosure obligations. Over 9,600 organizations, responsible for around 20% of global GHG emissions (disclosed through CDP in 2020) and the CDP Supply Chain program provides frameworks, processes, and tools for quantifying and reporting on Scope 3 GHG emissions.

Since its establishment in 1998, The GHG protocol is widely accepted as the global standard for carbon accounting and management and is used by over 90% of Fortune 500 companies when reporting GHG emissions. Among the various GHG Protocol standards, the GHG Corporate Standard and the Value Chain Standard are particularly useful to organizations disclosing Scope 3 emissions.

The Environmental Product Declaration (EPD) process has emerged as one of the gold standards for calculating Scope 3 emissions. The EPD process is based on a Life Cycle Analysis (LCA) and enables a company to follow a product-based approach to calculating Scope 3 emissions.

Flex and Scope 3 Emissions

Flex rigorously follows a three-step approach when tackling Scope 3 emissions:

Securing Stakeholder buy-in

Reducing emissions across the supply chain requires both our suppliers and our customers to commit to their own emissions targets. A key goal of the Flex Sustainability plan is for 50% of preferred suppliers to have a sustainability plan by 2025 and 100% by 2030. Additionally, the way in which our customers operate and dispose of our products contributes to our Scope 3 emissions, and products and programs such as the Flex Circular Economy can significantly reduce these emissions. While the long lifecycle of Flex Power Modules products may reduce the impact of this program, the industry-leading power efficiency of these products minimizes the Scope 1 emissions of our customers.

Our employees are also key stakeholders and activities such as business travel and commuting contribute significantly to our Scope 3 emissions. As well as implementing responsible travel policies, we have been encouraging sustainable commuting by offering electric shuttle bus services between sites.

Creating true partnerships across the value chain

At Flex, we recognize the importance of offering education and ongoing support to our suppliers if we are to achieve our sustainability goals. We encourage our suppliers to follow our example by following the CDP Supply Chain process when disclosing emissions data and we back this up with educational tools such as webinars, workshops, literature, and one-to-one workshops.

Standardization with disclosure organizations

To ease our suppliers into their emissions journeys, we help them leverage the substantial body of knowledge and frameworks developed from the lessons learned from Scope 1 and 2 emissions measurement. As experts in the CDP system, we are well placed to offer education, support, and guidance to our partners in compliance with this well-established framework.

Reducing Scope 3 emissions is a universal obligation

Reporting Scope 3 emissions makes companies more aware of the true environmental impact of their operations and also of the actions required to reduce it. As an industry leader, Flex has not only the resources but also the responsibility to work across our value chain to make a difference to our planet.

Previous blogs available in this series:

Part 1: Sustainability in Production

Part 2: Sustainability in Research & Development

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