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Making Net Zero Happen Series – Article 1
With 1,000 days until most CPGs are due to meet their self-imposed 2030 net zero targets, how can procurement act today to get their organisation where it wants to be?
Hans Neufeld, Director in Newton’s Consumer Goods practice, has spent the last decade moving organisations towards a future balancing cost considerations, consumers and carbon emissions – including contributing to the World Economic Forum’s far-reaching report on collective action and sustainability. With only a third of organisations set to hit their net zero targets (1), he explains why momentum has stalled in many CPGs, how to step up the pace and the start of a roadmap for the future (which will be unpacked further as part of this ‘Making net zero happen playbook’ series).
Think back five to ten years – chances are your organisation announced ambitious 2030 net zero targets to great fanfare. Back then, sustainability was rarely seen as sitting within procurement’s remit – despite up to 95% of CPGs’ emissions sitting with suppliers (2).
Over half the time to 2030 has passed. Targets have shifted, some scaled back – but they haven’t disappeared. And whether you inherited this role last month or five years ago, delivery now falls to you.
It’s not uncommon to be promoted or rotated into a procurement role in a specific category and suddenly inherit targets for an area you have never worked in before. Procurement has historically been underrepresented in climate action conversations, and the landscape may be entirely new to you – the outcome of a culture of CPGs rotating their best people between teams every couple of years.
Rest assured, you are not alone. It’s a challenge even for people in other industries who have been doing this for years – there is no universal methodology, regulations have a way of shifting, and levels of understanding and measurement are patchy across even the most established supplier networks. Candidly, I think the industry has come to an inflection point and it must now look at this differently. The risk is stark: if CPGs don’t tackle this in a new way it will materially impact not just near-term profitability but future growth.
Net zero execution procurement playbook
What is needed to gain momentum is anything but traditional procurement, and that puts you in a stronger position than you might think.
Only a third of organisations are on track to hit their targets, but yours very well could, with fresh thinking and 1,000 working days still to act.
The roadmap below has been developed over years of helping CPGs decarbonise their supply chains without sacrificing commercial performance. It runs across three stages, each anchored by a set of levers that turn intent into action.
This article focuses on stage one: Understand the context
Stages two and three follow in the articles ahead.
01
1. Understand the context
Lever 1: Know the obligations and constraints shaping sourcing decisions. Lever 2: Agree ways of working and internal governance. The outcome: A rich contextual understanding of the challenges and headwinds we collectively face
02
2. Model the portfolio
Lever 3: Know your portfolio and prioritise. Lever 4: Emissions baseline and measurement. Lever 5: Supplier landscape mapping. Lever 6: Dynamic procurement intelligence. The outcome: A prioritised portfolio understanding of carbon emissions across suppliers and materials
03
3. Plan and execute
Lever 7: Build the glidepath. Lever 8: Contract and commercial. Lever 9: Supplier engagement model
1. Understand the context
Lever 1. Know the obligations and constraints shaping sourcing decisions
Many external pressures and a complex regulatory landscape create significant headwinds with their interdependencies further complicating progress toward 2030 goals.
The Climate Transition Action Plan (CTAP) outlines the four systemic issues fuelling this:
- Government policy – The EU Corporate Sustainability Reporting Directive (CSRD) places greater scrutiny on sustainability progress audits and reporting, while the EU Deforestation Regulation (EUDR) requires proof that commodities traded in the EU are deforestation-free and traceable through geolocation data. The backdrop is fast-changing too, as we know. Trade policy adds another layer of complexity: with effective rates on goods from Southeast Asia now running at 25-145%, cost-driven sourcing decisions have direct carbon implications (3).
- Industry-wide system change – The systems that run and govern the industry take time to change and remain in flux. Updates to the GHG Protocol Corporate Standard are underway which could force participants to re-measure targets. Added to that, carbon tracking data is inconsistent and often incompatible between suppliers (and even between recognised methodologies).
- Technology maturity – The technology gaps are significant. Bio-palm alternatives remain pre-commercial. Flexible plastic recycling is technically viable but lacks infrastructure. Green fragrance production currently costs more than conventional alternatives. Scope 3 emission reduction requires step-changes delivered by innovative and cost-effective solutions but we’re not there yet.
- Consumer behaviour change – Though consumers are pushing for change, they are not consistently willing to pay a premium for sustainable products or change their own behaviour. Most people say they intend to use refillable formats yet reuse and refill models still account for only around 1-2% of major brands’ packaging (4). Procurement can do everything in its power to decarbonise inputs but how consumers use products is even harder to affect – and the environmental impact there remains substantial. For laundry and hair care, product use emissions represent 60-70% of lifecycle carbon emissions (5).
Lever 2. Agree ways of working and internal governance
Measurement matters, but the biggest lever to achieving sustainability ambitions is treating carbon with the same rigour as cost. If a buyer can’t compare two materials on a cost–carbon basis then sustainability is still being treated as a separate conversation.
Since as far back as 2017, L’Oréal has scored every new product’s environmental impact through its SPOT tool, with CEOs and brand managers’ bonuses in part tied into how well they reduce carbon emissions (6). For this type of progress to happen, action is needed on three fronts:
- Fixing immediate tactical blockers by creating ownership for very specific actions
- Building structural enablers by embedding carbon maps, segmenting suppliers by maturity and standardising methodology
- Transforming the operating model so carbon is central to every sourcing decision and director objective, governed with the same rigour as cost
The most urgent of these is fixing the immediate tactical blockers. Here are four steps you can take this week.
4 steps to take this week to fix the immediate tactical blockers
Step 1: Run an 80/20 on your supplier base
Many procurement teams sit at one of two extremes, asking for too little information of suppliers or too much. This leads to inaccuracies and incompletion across the board.
The Pareto principle applies to emissions as sharply as to revenue. Around 1% of suppliers typically drive up to 50% of Scope 3 emissions.
The Pareto principle applies to emissions as sharply as to revenue. Around 1% of suppliers typically drive up to 50% of Scope 3 emissions. So, direct resource to where it moves the dial:
*Percentages are illustrative and based on typical averages across CPG supply chains
P&G found that 10% of ingredients cause 90% of supply chain emissions so it created a system to rate, choose and measure suppliers based on environmental performance (7).
Step 2: Build a mandated team. Establish each of your highest priorities, naming an emissions owner per category. One named buyer owns the carbon number, the engagement calendar, and eventual glidepath (see the final article in this three-part series for more detail).
Step 3: Assign all SAQs a named follow–up action. A sustainability questionnaire is only sent when there is a named owner and a clear action plan for the response.
Step 4: Forward-plan clause upgrades using contract renewals. Identify which strategic contracts will be renewed in the next 18 months. Ensure both commercial and sustainability terms are being reviewed at once. This is also where AI-assisted contract analysis can accelerate the process, identifying opportunities across value levers and informing negotiation strategies. Tools like Newton’s CLARA (Contract Lifecycle and Risk Analytics) could help here
Definitive multi-layered action drives ROI. Look at how Indra Nooyi moved PepsiCo towards a focus on ‘performance with purpose’ because it was what employees wanted and she believed changing consumer behaviour meant that the business would disappear without it (8). Or how sustainable products in US CPGs have grown at nearly double the rate of the overall market over the past five years (9). The industry-wide cost of Scope 3 emission liabilities annually through carbon pricing is $500 billion (10). Investment in climate initiatives sees 22-33% cost savings a year over time, not to mention stronger investor relations and lower stock volatility (11). The evidence is consistent and compelling.
Start cracking this and you are building real resilience to regulatory exposure, through decarbonisation efforts that can be cost‑neutral, or in some cases, deliver net savings and drive growth.
Together these two levers deliver the outcome that makes the rest of the roadmap possible: a clear-eyed understanding of the headwinds you face, and the governance foundations needed to act on them. That is stage one done. Stages two and three are where it becomes a plan – and where the real movement happens.
Delivering on your 2030 targets is a strategic business priority – one requiring sustainability, commercial, finance, and procurement working together, with procurement at the very centre. They are still within reach. Get in touch with Hans to receive the next two articles as they are published, or to discuss how Newton’s Net Zero Procurement approach can help you deliver on them.
Source references:
(1) CDP Corporate Health Check, 2025, (2) Scope 3 Emissions: A Complete Guide to the 15 Categories, Carbon Maps, (3) Implications of U.S. Tariffs on Southeast Asia: Navigating The Trade Tumult, Sidley, (4) Unlocking a reuse revolution: scaling returnable packaging, Ellen MacArthur Foundation, (5) Laundry: lightening the load, National Geographic, (6) How L’Oréal Is Turning Itself Into A Sustainability Leader, Fast Company, (7) P&G 2022 Citizenship Report, (8) PepsiCo CEO Indra Nooyi: ‘I Don’t Think Women Can Have It All Either’, The Aspen Institute, (9) U.S. Positioned for Additional Growth as Sustainability-Marketed Products Flourish in Europe, Circana, (10) Climate Inaction Could Cost Companies Over $500 Billion in Annual Liabilities Globally by 2030, Ecovadis and BCG, (11) The Impact of Setting Science-Based Targets on Businesses
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