Procurement: The Engine Driving Net Zero

The drive towards net zero, which years ago was thought to be impossible, is now central to the aims of the business world.

Most of the biggest organisations in the world have goals set, timelines published and commitments communicated. The real test now lies in execution.

Procurement is at the heart of the efforts to turn these sustainable goals into a reality.

The Forbes Research 2025 State of Sustainability Survey, which included over 1,100 global executives from companies with at least US$500m in revenue, revealed that 79% of companies now have a CSO. The survey found that 43% of leaders will work with their CSO, which represents more than double the previous year's figure.

With this comes the target of addressing Scope 3 emissions, which tend to make up the majority of companies' carbon emissions. Procurement teams are often the ones tasked with turning the lofty promises into outcomes which can be quantified.

While it is still very much a sustainability challenge, many also see it as a commercial one. Customers are often swayed by a company's efforts to be green. This has made it a procurement problem, as it strikes the right balance between decarbonisation with cost pressure, supplier risk and operational resilience.

Bringing suppliers on the journey

With this also comes the need for the larger organisations to encourage all suppliers, pulling everyone towards a sustainable future. This requires compliance-driven supplier engagement to drive action.

With the complex global value chains in some of the biggest companies, some suppliers may lack the data, expertise or tools to decarbonise at the pace required. In response, procurement teams have installed supplier programmes, which are not simple questionnaires, but instead offer particular solutions, shared platforms or even financial access. The lesson is simple: emissions reduction at scale cannot be achieved by enforcement alone.

At the same time, net zero is reshaping how procurement influences core business decisions. Carbon considerations are increasingly factored into supplier selection, product design and contract structures, particularly in industrial and manufacturing environments where emissions are embedded deep within the value chain.

Procurement teams are working more closely with engineering, operations and finance to ensure decarbonisation efforts align with commercial realities rather than sitting in parallel to them.

The path forward

But the goal posts are moving. In November, the Science Based Targets initiative (SBTi) consulted on its revised Corporate Net-Zero Standard, releasing a second draft shaped by feedback from the initial round and further input from technical working groups.

The update seeks to strengthen scientific accuracy while making the framework clearer and more usable for organisations navigating decarbonisation.

The purpose behind the revision is straightforward: to make it easier for companies to translate climate ambition into credible emissions reductions at speed.

The revised Corporate Net-Zero Standard offers a streamlined structure that guides organisations in setting net-zero targets in a way that is consistent, actionable and scalable. Rather than treating net zero as a distant goal, businesses are expected to embed it as a strategic direction, aligning operational and value chain activities with long-term climate goals. These plans must be supported by publicly disclosed transition strategies.

In the delivery decade for net zero, procurement's role is clear. The organisations that succeed will be those that move decisively from policy to purchase order, turning ambition into action across the supply chain.

Cutting emissions

For many organisations, net zero will be won or lost in the supply chain. Schneider Electric’s expanded supply chain decarbonisation programmes show how procurement can move beyond reporting and play a direct role in delivering Scope 3 reductions at scale.

Rather than placing the burden solely on individual suppliers, Schneider Electric is using procurement-led collaboration to address one of the biggest barriers to net zero: access to renewable energy. By aggregating demand through multi-buyer power purchase agreements and renewable energy cohorts, the company is enabling suppliers to decarbonise their own operations – cutting Scope 1 and Scope 2 emissions that flow directly into customers’ Scope 3 footprints.

The impact is already material. More than 2,700 suppliers across 50 brands have engaged with Schneider Electric’s programmes, collectively procuring over 2 TWh of renewable electricity. Crucially, these are structural emissions reductions, locked in through long-term procurement mechanisms rather than offsetting.

“To decarbonise global supply chains at scale, we need more than commitments; we need collaboration, innovation and practical tools tailored to regional realities,” says John Powers, Vice President of Strategic Renewables at Schneider Electric.

“This expansion reflects our belief that every supplier, in every geography, should have access to the insights and partnerships needed to accelerate their climate journey.”

Securing renewables

Virgin Media O2 is using procurement as a strategic lever to deliver net-zero outcomes. Its decade-long power purchase agreement (PPA) with The Renewables Infrastructure Group (TRIG) secures around 15% of its electricity needs from wind farms in Scotland and Wales, supporting the company’s ambition to reach net zero across its full value chain by 2040 – a decade ahead of the UK’s legal target.

“By purchasing long-term renewable energy at scale, we’re not only cutting carbon but protecting our network from future energy shocks,” says Dana Haidan, Chief Sustainability Officer at Virgin Media O2. The fixed-term contract provides operational and financial predictability, ensuring reliable electricity for critical network infrastructure while mitigating exposure to volatile energy markets.

Minesh Shah, Managing Director at TRIG, adds: “Such agreements present an attractive opportunity to help businesses access renewable electricity, while delivering secure, long-term revenue streams for our shareholders.”

The PPA aligns with Virgin Media O2’s Better Connections Plan, which has already achieved a 56% reduction in Scope 1 and Scope 2 emissions and a 19% reduction in Scope 3 emissions since 2020.

The heart of Hyundai

Hyundai Motor Company is turning sustainability into a core procurement and operational strategy, using long-term renewable energy agreements and supply chain reforms to advance its net-zero ambition. With a commitment to carbon neutrality by 2045, the company is embedding ESG principles across manufacturing, sourcing, and stakeholder engagement.

“At the heart of Hyundai’s vision is our commitment to sustainability,” says José Muñoz, President and CEO. “We’re working diligently to reduce the environmental impact of our vehicles and manufacturing processes throughout their lifecycle. Our commitment to achieving 100% renewable energy (RE100) across our businesses is taking shape through large-scale renewable energy purchase agreements in Korea, the US and India.”

Hyundai has signed major renewable power agreements across multiple regions, while electrification of its fleet and advanced manufacturing innovations, including AI-based energy management and low-temperature paint curing, are reducing Scope 1 and 2 emissions. In parallel, the company is addressing upstream Scope 3 emissions through supplier engagement, ESG risk assessments, and updated procurement codes aligned with international labour and environmental standards.

Beyond emissions, Hyundai integrates sustainability into governance, human rights, and operational resilience. Strategic procurement decisions – ranging from renewable sourcing to localised EV production – demonstrate how net-zero delivery depends on embedding decarbonisation directly into global supply chains, turning commitments into measurable outcomes at scale.