A Practical Guide to Supplier Alignment Targets Under SBTi V2.0

Understanding supplier alignment targets under SBTi V2.0

The Science Based Targets initiative (SBTi) has released its landmark Corporate Net-Zero Standard V2.0, representing a significant evolution in corporate climate action. For organisations committed to credible decarbonisation, this update brings a much sharper focus onto the value chain, where the majority of emissions typically reside. This shift elevates the importance of setting effective supplier alignment targets under the new framework, moving them from a recommended practice to a core component of any robust net-zero strategy. But what does this mean in practice?

Supplier alignment targets are a strategic approach where a company encourages or requires its suppliers to set their own science-based emissions reduction targets. Instead of just collecting emissions data from suppliers to report on Scope 3, this method cascades action throughout the value chain. It transforms the relationship from a simple data transaction into a collaborative decarbonisation partnership. Under the V2.0 standard, the expectation is clearer than ever: companies must not only measure their supply chain emissions but also actively work to reduce them. This involves engaging suppliers directly to drive down their operational and value chain emissions, ensuring that reduction efforts are distributed and impactful. The goal is to create a domino effect, where corporate climate commitments translate into tangible action across entire economic sectors.

What has changed with V2.0?

While supplier engagement has always been part of the SBTi's guidance, Version 2.0 formalises and strengthens the requirements. The standard now provides more explicit criteria for what constitutes meaningful value chain engagement. It pushes companies beyond basic data collection towards fostering genuine climate action among their partners. The intent, as outlined by the SBTi, is to “drive supplier, customer, and product performance compatible with a net-zero economy.” This means that simply using industry-average data for your Scope 3 reporting will become increasingly insufficient. The new standard prioritises the use of primary, supplier-specific data and demonstrated progress on supplier-set targets, making the implementation of supplier alignment targets under V2.0 a critical pathway to validation.

Why the increased focus on the value chain?

The sharpened focus on Scope 3 emissions is a logical and necessary step in the global effort to decarbonise. For most sectors, from retail and manufacturing to technology and professional services, emissions from the value chain (both upstream and downstream) can account for over 80% of their total carbon footprint. Ignoring these emissions means ignoring the biggest piece of the puzzle. The SBTi recognises that without systemic change across supply chains, corporate net-zero pledges risk being hollow.

“Companies are expected to actively use all available levers within their control or influence to implement their targets and to actively work to address barriers and dependencies, including operational improvements, procurement choices, supplier engagement, and product or service innovation.”

This statement from the SBTi standard underscores a fundamental truth: real climate leadership involves influence, not just direct control. By engaging suppliers, companies can unlock emissions reductions on a scale far greater than they could achieve by focusing solely on their own operations (Scope 1 and 2). This collaborative approach also builds a more resilient and transparent supply chain. When suppliers are actively managing their climate risks and improving their operational efficiency, it benefits everyone. It fosters innovation, strengthens partnerships, and ultimately creates a value chain that is better prepared for a low-carbon future.

A practical framework for setting supplier alignment targets under the new standard

Transitioning from ambition to action requires a structured approach. Implementing a successful supplier engagement programme to meet the new SBTi criteria involves several key stages. Here is a practical framework to guide your organisation in setting and achieving supplier alignment targets under the V2.0 standard.

1. Segment and Prioritise Your Supply Chain: You cannot engage every supplier with the same level of intensity. Start by identifying your emissions hotspots. Use your spend data and initial Scope 3 calculations to pinpoint which suppliers and procurement categories contribute the most to your footprint. This allows you to focus your efforts where they will have the greatest impact, applying a tiered approach to engagement.
2. Establish a Credible Baseline: Before you can track progress, you need a reliable starting point. This means moving away from spend-based estimates and towards supplier-specific data. A platform that combines publicly available disclosures with direct data collection can quickly build a comprehensive and verified baseline. This provides the foundation for setting meaningful targets and measuring reductions accurately.
3. Develop a Scalable Engagement Programme: Your engagement strategy should be designed to support suppliers, not just make demands of them. A successful programme often includes several components:
   • Education and Resources: Many suppliers, especially small and medium-sized enterprises, may lack the expertise to set science-based targets. Provide them with training, webinars, and access to resources.
   • Tools and Benchmarking: Offer suppliers tools to calculate their own footprints. Share scorecards that show them how they compare to their peers, creating a powerful incentive for improvement.
   • Clear Communication: Establish a central portal for communication and data submission. This simplifies the process for suppliers and reduces administrative burden for your team.
4. Integrate with Procurement Processes: To make decarbonisation a core business function, it must be embedded in procurement. Include emissions data and climate commitments as criteria in your sourcing and supplier management processes. This sends a clear signal that sustainability is a key priority and allows your procurement teams to make climate-aware decisions before a purchase order is ever raised.

Overcoming the common hurdles to supplier alignment

While the benefits are clear, the path to achieving widespread supplier alignment is not without its challenges. Many organisations struggle with low response rates from suppliers, inconsistent data quality, and the sheer administrative effort required to manage such a programme at scale. This is where the old way of doing things falls short.

The traditional approach, often involving complex spreadsheets sent out once a year, creates significant friction. Suppliers suffer from survey fatigue, receiving similar requests from multiple customers. Internal teams spend countless hours chasing responses, cleaning data, and trying to reconcile different formats. This manual process is slow, inefficient, and rarely yields the high-quality, audit-ready data needed to confidently manage your supplier alignment targets under the rigorous SBTi standard.

The new way involves leveraging technology to automate and streamline the entire process. A dedicated supplier engagement platform can transform this challenge into an opportunity. By using a central hub that draws on a vast database of existing disclosures (from sources like CDP) and simplifies direct data collection, you can minimise the ask of your suppliers. Automated reminders, quality checks, and clear dashboards reduce the administrative load, freeing up your team to focus on strategic engagement rather than manual data entry. This approach not only boosts response rates but also improves the quality and reliability of the data you receive.

The role of technology in achieving alignment

Meeting the heightened expectations of the SBTi Corporate Net-Zero Standard V2.0 requires a new level of sophistication in how organisations manage their value chain emissions. Technology is no longer a nice-to-have; it is the essential enabler for implementing a credible and scalable supplier engagement strategy.

A modern platform like Ditch Carbon provides the single source of truth needed to manage the complexity of Scope 3. With data on over 2 million organisations, it allows you to establish a robust baseline in weeks, not months. The platform's engagement tools are designed to lighten the load for everyone, using pre-populated surveys and providing suppliers with valuable scorecards and peer benchmarks to motivate action.

Ultimately, achieving your supplier alignment targets under SBTi V2.0 is about more than compliance. It is an opportunity to build stronger, more collaborative relationships with your suppliers and drive real, measurable decarbonisation. The standard has raised the bar for corporate climate action, and with the right strategy and technology, your organisation can confidently meet it.