Accelerating sustainability performance across the renewable value chain
Published on 2nd of March 2021
Senior Director and Head of Sustainability at Vestas
With renewables steadily increasing their dominance across global energy systems, Vestas is committed to ensuring that our industry builds scale sustainably, as well as profitably. If renewables are to support the planet’s shifting trajectory into a more sustainable era, the mechanics of our value chain are just as key to our sustainability performance as the carbon emissions avoided by our products.
Prioritizing sustainability during a period of rapid growth can be a complex task, particularly across a value chain that is as multi-faceted as the one we work with at Vestas. A wind turbine for example, consists of several thousand parts delivered by several thousand suppliers. To mobilize each cog in this machine, and to increase its sustainability performance, requires clear ambitions from industry leaders. As the world’s biggest wind energy manufacturer, Vestas has therefore established high expectations around the sustainability performance of our suppliers. We believe this is an integral task in elevating the overall sustainability performance of our industry.
At Vestas, we are working to inspire our supplier network to join us in the journey to eliminate carbon emissions from the renewable value chain. This work is crucial, as our supply chain is responsible for around 99 percent of our carbon footprint, and its level of emissions will only increase as our business grows if we don’t address this – particularly within raw materials and transportation. Although Vestas cannot directly control the production processes across our supplier network, we believe that establishing clear parameters for our supplier engagements can make a big difference.
As part of our sustainability strategy, Sustainability in Everything We Do, we intend to reduce carbon emissions across our supplier network by 45 percent per MWh delivered to the market. We have chosen this specific target because it incentivises sustainability partnerships with suppliers that reduce carbon emissions and allows for the continued sustainable growth of the global renewable energy sector.
At Vestas, we are working with two levers to substantially reduce emissions from our supply chain. We have initiated a comprehensive set of activities to gain transparency and incentivise carbon emission reductions in our supply chain. We began working with 27 strategic suppliers, covering 30 percent of our material spend by launching key initiatives. This group were asked to commit to powering their operations by 100 percent renewable electricity, as well as reporting CO2 emissions and production waste for Vestas products. We have also asked this group to commit to ambitious targets for reducing carbon emissions from their own operations, leveraging our own journey towards achieving carbon neutrality by 2030 as a frame of reference.
Additionally, by 2022, these 27 suppliers will be expected to set targets for reducing their own scope 3 emissions. Given that we have already begun this journey at Vestas, we are working to support our suppliers along this path by sharing insights and experience from our own journey towards achieving carbon neutrality. Throughout 2020 we held webinars with a sustainability focus, offered help for calculating carbon footprints, and based our annual supplier forum around the theme of sustainability. With these activities, we are gaining first-hand experience to guide the next stage of this process: onboarding a broader share of our supplier network to align with our sustainability journey.
“Vestas’ expectations of suppliers are well in line with Hempel’s own ambitions as reflected in our new sustainability framework, Futureproof. One of our goals is to be carbon neutral by 2025 in scope 1 and 2. When our customers communicate their expectations clearly, the internal buy-in for our own sustainability initiatives are further strengthened.” Dorthe Scherling Nielsen, Head of Sustainability & Government Affairs at Hempel
In order to further incentivize more sustainable business practices across a larger share of our supplier network, we have also integrated sustainability into our supplier account plans and supplier scorecards, covering more than 150 suppliers and approx. 55 percent of our material spend. Overall, sustainability and safety now account for 40 percent of the criteria we use to evaluate our suppliers. By the end of 2020, we saw a 27 percent increase in these suppliers' sustainability performance over just nine months.
"Our goals around reducing our Scope 3 emissions are ambitious, but we strongly believe that by raising the bar for sustainability performance across supplier engagements, Vestas can help to accelerate the overall sustainability performance of our industry. Going forwards, we'll be evaluating suppliers by their willingness to join us in this ambitious journey, and ensuring that all our suppliers consider their sustainability performance carefully in order to do business with Vestas.” Dieter Dehoorne, Group Senior Vice President, Global Procurement
Vestas is also wielding our potential to affect a direct influence on carbon emissions from across our supply chain. As the technology leader for wind energy, we continuously re-assess our turbine design and focus on low-emission design choices. Our recent investment in Modvion, a Swedish start-up working to scale up a bio-composite technology to build turbine towers, supports this ambition. Modvion’s modular approach to designing and building wooden turbine towers holds the potential reduce carbon emissions from tower production by 80 percent. When matured, this technology signals a significant opportunity for Vestas to reduce the carbon footprint of our own design and manufacturing operations, as well as being able to offer a more sustainable solution for our customers.
Ultimately, reducing emissions from our value chain will require a partnership approach to sustainability. At Vestas, we are actively seeking to form these partnerships to collaboratively achieve CO2 savings across our supply chain. For example, we have entered sustainability partnerships with our suppliers DSV Panalpina and Hempel, working to reduce emissions from transport and industrial coatings. The partnership with DSV Panalpina involves a mutual commitment to reduce and eliminate carbon emissions related to transport and logistics. Together with Hempel, we aim to reduce surface treatment costs and support sustainable coating solutions. Our initial calculations suggest that changing the surface treatment application process for wind turbines will potentially reduce carbon emissions by 60 percent per year.
While we’re still at the early stages of this journey, we are hugely enthused by the progress we’ve seen in 2020. So many of our partners and suppliers have welcomed our support in improving their own sustainability performance, signalling a significant potential to transform the value chain that will drive the energy industry of the future.
If you have any questions regarding Vestas’ sustainability strategy or any of our targets, please do not hesitate to contact the Sustainability Department at email@example.com