Value chain emissions are increasingly being scrutinized by progressive climate-conscious end consumers, particularly the younger generations. A recent survey¹⁶⁸ found that 73% of Gen Z consumers (21-25-year-olds) are willing to pay more than every other generation for sustainable products. Reducing direct emissions within an industry will impact the indirect emissions of suppliers and customers (Scope 2 or Scope 3 emissions), and vice versa. This common ground strongly encourages new collaborations between heavy industries and value chain stakeholders.

Figure 14: Collaboration model types between customers and suppliers

Collaboration with customers through offtake agreements or pre-commercial public procurement (Figure 14) can provide heavy industry companies with the visibility they need for investments in low-emission solutions (public procurement accounts for 46% of US cement consumption¹⁶⁹). Customers in return can secure the supply of low-emission products, which will initially be scarce.

In addition, heavy industries can reduce their emissions by increasing the proportion of recycled versus primary feedstock and material – what
is now referred to as the “circular economy”. Collaboration with suppliers and customers through the development of circular supply networks or circular product development can support that objective. Suppliers can engage in new value-added activities (e.g. high-resolution waste sorting) and customers can benefit from lower-emission products.

Heavy industries are increasingly engaging to limit their Scope 3 emissions (estimated at 80% of total oil and gas CO2 equivalent emissions,¹⁷⁰ 20% of steel emissions¹⁷¹ and 20% of cement emissions¹⁷²), which are driven by companies’ upstream and downstream value chain activities. Collaboration with suppliers and customers through shared value chain decarbonization initiatives or supplier performance programmes can help tackle these emissions. Suppliers can benefit from visibility on low-emission procurement standards, and customers from the unique engineering and technology expertise of another industry to decarbonize.

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