Spotlight on Sustainable Procurement

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Silicon Valley, California, September 27, 2023/Meeting Recap/  Autotech Council's third spotlight meeting in the 2024 series, co-hosted by Avanta Ventures, explored Sustainable Procurement in the automotive industry. We enjoyed several great rapid-fire startup presentations in the sector, followed by a great discussion with the convened experts.

The Rapid-fire presentations included topics such as measuring, accounting, and validating a company’s CO2 emissions, from Scope 1, 2, and 3. We discussed how interested companies can not only measure the treatment of carbon upstream in their supply chain, but also important ethical human issues such as treatment of employees or contractors. And we ventured beyond CO2, with a discussion of new packaging materials and practices that stress the first two Rs, reduce and reuse.

Thanks to our presenters, and our question panel with Deepak Mishra, Senior Associate at Avanta Ventures, and Hannah Bailey, Product Manager at Ford Motor Company. We flowed from the presentations, and welcomed Josh Seidenfeld from Scope Climate to help facilitate the discussion. What we love to do in these sessions is let the startup presentations get the ideas flowing, then dig into them a bit with an open mic atmosphere that gets everyone in the room involved. In our discussion, we covered ideas such as:

• The “future of work” question of whether commute time is work time, or personal time. This issue is increasingly important after COVID as companies call employees back to the office, but is also extremely relevant for Scope 3 calculations, because we need to choose whether to include private car commutes to work as part of Scope 3. The conclusion was that, technically, it is part of Scope 3, but that if it’s less than 1%, it need not be itemized. There are bigger fish to fry, and the cost of accounting may exceed the benefits.
• What about fraud or misrepresentations? In the carbon credit sector, we saw that companies can exaggerate the tons of carbon the retire. Could something similar happen, where suppliers deliberately understated their CO2 output? The answer was yes. But that each companies’ statements required a “trust but verify” approach, where random audits and checks could validate their claims. We discussed how an industry could emerge much like accountants do with financials. It’s also possible that a government body like the SEC emerge in various regions to set guidelines for the auditors. Who will watch the watchers, if you will.
• We also discussed the beneficial ripple effects of large companies that drive their suppliers to be cleaner. The suppliers will shift to be greener for all their customers, not just the ones demanding it. Other companies will pre-emptively reduce their CO2 so that they can win future contracts. Suppliers will demand THEIR suppliers reduce CO2, etc.

All in all, a very interesting session. Thanks again to our co-hosts at Avanta, and the presentations are available to members in the library.

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