Businesses in MENA Embrace Carbon Tracking in Supply Chain as Key to Net Zero Ambitions

In a shift towards sustainability, MENA region business leaders are increasingly prioritizing carbon footprint reduction as a core criterion in their procurement processes. Efficio reported in its 2022 "Bridging the Gap" research that 79 percent of business leaders in the MENA region view achieving 'Net Zero' emissions as a critical goal for their organizations.

This trend marks a departure from traditional procurement criteria that focused mainly on quality and price. Instead, public and private sector procurement departments are now considering suppliers’ carbon emissions and carbon management strategies before awarding contracts. This approach aligns with the growing emphasis on Environmental, Social, and Governance (ESG) factors in business operations.

Efficio's research indicates that supply chain emissions, often categorized as Scope 3 emissions, can account for 40 to 80 percent of a company's total carbon footprint, sometimes even exceeding 90 percent. This underlines the significant role supply chains play in an organization's overall environmental impact.

Edward Cox, Principal and Sustainable Procurement Practice Lead at Efficio, emphasized the crucial role of procurement in driving sustainability. “Procurement is increasingly accountable for a broader range of metrics, with ESG considerations at their core. Choosing the right suppliers is more vital than ever,” he stated. Cox also highlighted that initial steps towards sustainability could be cost-neutral or even cost-saving, challenging the misconception that sustainable practices are invariably expensive.

However, the journey towards sustainability presents challenges, particularly in measuring and gaining visibility on sustainability impacts like supply chain emissions.

The urgency of achieving net zero is a global concern, with targets such as the Paris Agreement's 2050 deadline and individual national goals, including Saudi Arabia’s 2060 target. Cox believes that while the achievability of these targets is uncertain, the commitment and resources in the GCC region, including in the UAE and Saudi Arabia, are strong indicators of progress.

Efficio's insights suggest that incorporating sustainability into procurement decisions is a critical step towards achieving Net Zero and building a more sustainable future. The companies proactively adopting these practices are setting a precedent for environmental responsibility in the region.