Driving sustainability in the supply chain - Solving global challenges together.  
27 September, 15:00 - 17:15 CET, HQ of Philips, Amsterdam, The Netherlands.

Ladies and gentlemen, thank you for welcoming me today to the first event of the global campaign of the NL Business Hub Network

Our economy needs to become Net Zero by 2050.

Climate change is global,

supply chains are global and

our actions are in our hands local.  

We are all here to discuss how to drive sustainability in the supply chain. It’s wonderful so many of you are here, and it's timely.

Not only scientists warn us about a changing climate, you just need to look out of the window, or on your tablet, to get the message. This summer we have experienced extreme weather events throughout Europe and we are in shock about the disaster in Libya. There is no continent that is untouched by the effects of climate change.

I often speak to the private sector, because besides the government you are our main ally to drive solutions.

When I met with 400 CFOs a year and a half ago, I asked them two questions, and I’ll ask them to you as well: Let me start by a show of hands.

1. Who of you is personally worried about the consequences of climate change?
2. Who of you thinks that your company is on track to become (a) climate neutral and (b) has insights into the climate risks in your supply chains – both upstream and downstream?

This is why I want to talk to you about three things:

1. Mitigation, the emission reduction in your supply chain
2. Adaptation, the resilience in your supply chains
3. Finally, what the private sector can expect at the Climate Summit (COP28) in Dubai this November, including positive examples from the Dutch private sector.

First on mitigation, the emissions in your supply chains.

From a country perspective, 40% of the Dutch Greenhouse Gas footprint extends beyond the Netherlands, due to the fact that a large proportion of the goods and services used in this country are imported from abroad. We need to develop the right policies, standards and support packages to reduce these emissions.

Business perspective there is a parallel: A great percentage of your emissions are in scope 3. These are emissions from activities in the supply chain, not owned or controlled by you (the reporting organization).

PwC noted that scope 3 emissions are both large in size, about 65% to 95% of most companies’ carbon impact, and indirect.

So, both governments and businesses have scope 3 emissions that need our attention.

One concrete bottleneck is that companies are currently not rewarded for delivering reductions in their scope-3 emissions when it comes to extraction of raw materials. As a result, it is not sustainable and has an impact on entire industries.

We are taking steps in the European Union. There are already EU-instruments that contribute to emission reduction elsewhere. For example, the EU Carbon Border Adjustment Mechanism, or CBAM, is designed to level the playing field between EU and third country producers, by putting a carbon price on certain imported products where emissions levels are higher.

On a national level, at the request of the business community, our government is currently investigating bottlenecks and solutions to make supply chain emissions more measurable and reportable. We will share the outcomes with you before the end of this year. We invite you to share your own bottlenecks and needs with us, so we can also improve our policies and help you in reducing your emissions.

In short: Mitigation seems like a moral obligation, but an earth on fire is not in any business’ interest.

Secondly on adaptation, the resilience of your supply chains.

I have read a recent Accenture report based on input from more than a thousand CEOs, across 113 countries and 21 industries.  

More than half (54 %) of these CEOs say their companies are only at a basic level, or have not even started, conducting scenario analysis to identify climate risks and to build climate resilience and adaptation into their supply chain.

This is shocking to me, because your business model is directly at risk.

Note that your interests in adapting to climate is often aligned to the interest of the countries you operate in. Here lies a great opportunity for cooperation. For example, there is a risk in sourcing food from a country like Vietnam that is increasingly vulnerable to extreme weather events. Adapting and safeguarding production of food is in both your interest. An other example is the apparel industry in Bangladesh. Are the factories placed in vulnerable locations facing sea level rise?  

Looking ahead at COP28, this December in the United Arab Emirates.

There is a lot of commentary on Dr. Sultan Al Jaber's COP chairmanship. He is not only a fellow climate envoy, minister of industry and chairman of the sustainable energy company Masdar, but also CEO of state oil company Adnoc. This criticism is understandable, because it creates at least the appearance of a conflict of interest. I was also surprised by his appointment. Yet his appointment can also be positive: never before has a COP president had so much business experience and it offers opportunities if companies themselves have a seat at the table. Not at the formal negotiations between countries, but parallel they will have a platform for dialogue. And there will be match making event to finance and scalable solutions.

The COP organization shows ambition by sending out the clear signal that the business community has an important role to play. The Dutch private sector is amongst the leaders on food, water and energy. This can help us shape the Net Zero world we want to live in. The Dutch are conscious of global challenges such as climate change and are innovative.

You are also working for successful companies, both here in the Netherlands and worldwide.

You can have a tremendous impact on reducing emissions around the world.

Your business success is dependent on a stable climate and your supply chains need to be resilient. When we all stand together, governments, knowledge institutes and the private sector, we can reduce emissions and make our entire supply chains ready for the future.

Be the change, so we can fight climate change!