Driving Net Zero: Carbon Footprinting and Supplier Engagement for Aegon UK

About the client

Aegon UK, a major financial services company headquartered in Edinburgh, employs approximately 2,800 staff across four main locations in the UK.

Objective: To align with its Net Zero goals, Aegon UK needed a comprehensive strategy to understand and manage its greenhouse gas emissions across both its operations and supply chain.

Challenges

Aegon UK’s primary challenge was the significant proportion of its GHG emissions originating from Scope 3 sources, which accounted for 91% of its total operational GHG footprint. The largest contributors to these emissions were purchased goods and services, business travel, employee commuting, and remote working, with purchased goods and services representing 73% of Scope 3 emissions.

A critical aspect of the challenge was the need for strategic engagement with Tier 1 suppliers – Aegon UK’s top 50 suppliers, responsible for circa 90% of its procurement spend, out of approximately 530 suppliers in total – to address emissions reduction and decarbonisation effectively.

Acclaro Advisory’s Approach

Data Collection: Acclaro Advisory undertook a comprehensive data collection initiative, focusing on Scope 3 emissions across key categories such as purchased goods, services, business travel, and commuting.

Supplier Engagement: The Acclaro team engaged with Tier 1 suppliers to develop a responsibility score. This score was based on various criteria such as internal questionnaires, emissions factors used, EcoVadis scores, and whether they had their own Net Zero plans including validated Science-Based Targets.

Scoring and Ranking: Suppliers were then assigned a numerical responsibility score, which considered the influence and materiality of their emissions, as well as the environmental impact of their industry (with higher-emitting industries like Facilities Management and transportation receiving particular focus).

Key Actions and Methodology

Acclaro developed a tiered engagement strategy to engage with suppliers in different ways based on their Net Zero maturity. The categories and approach were as follows:

• Green Category: Suppliers already engaged in their own Net Zero initiatives were placed in this category. There will be a need to ensure that continuous data updates and compliance checks are in place.
• Amber Category: Suppliers requiring moderate engagement will be issued tailored questionnaires to gather further information and identify gaps.
• Red Category: High-risk suppliers will be engaged directly to develop action plans aimed at better aligning their operations with Aegon UK’s Net Zero objectives.

Acclaro developed a plan for targeted interventions to focus on high-emission, high-impact suppliers. Tailored approaches were developed based on the industry type and emissions profile of each supplier.

Acclaro also conducted Carbon Literacy training and certification with Aegon UK’s Supplier Management team, equipping the team with the confidence and knowledge to have more informed discussions with suppliers.

Results

Acclaro Advisory’s structured approach to supplier engagement will enable the establishment of a clear pathway for Aegon UK to achieve its sustainability goals and will deliver:

• A significant increase in the percentage of green-ranked suppliers is targeted, with the aim of reaching 60% by 2025 and achieving 100% green ranking among Tier 1 suppliers by 2030.

• Enhanced data accuracy and quality of emissions data have led to more informed decision-making and strategic planning around decarbonisation.

• Aegon UK’s Supplier Management team gained a clear understanding of the compliance gaps within its operations and supply chain, giving them the tools to  embed this into business as usual.

• The successful implementation of this strategy positioned Aegon UK’s division as a leader within the broader group, demonstrating its commitment to sustainability and effective GHG management.

• The approach fostered a more structured and positive dialogue with Aegon UK’s suppliers.

“Acclaro Advisory’s support has been invaluable in equipping our Supplier Management team with the tools and knowledge to drive meaningful engagement with our suppliers. Their tailored approach has helped us better understand and address emissions across our supply chain, positioning us to meet our Net Zero targets with greater confidence and clarity.”

Kurt Neilson, Resilience & Supplier Oversight Director at Aegon UK

Future steps

Future steps include ongoing collaboration with Aegon’s Supplier Management team to upskill and align on KPIs for continuous improvement. Acclaro will review and update supplier rankings and engagement strategies based on annual data analysis, ensuring continuous improvement towards Aegon UK’s Net Zero goals.

Conclusion

Through a structured and strategic approach, Acclaro Advisory successfully supported Aegon UK in understanding and managing its greenhouse gas emissions across the supply chain. The engagement strategy not only addressed immediate emissions but also laid the foundation for long-term sustainability and Net Zero achievements.