Establish emissions baseline and identify hotspots Start with spending-based estimates, then increase granularity: Leading companies go further than spending-based or industry-average emissions categories. As relationships mature, they improve accuracy by collecting primary data from key suppliers, aiming for product-level carbon footprints. Prioritize data collection by emissions: Rather than seek full visibility, companies follow a Pareto approach16 and concentrate on categories and suppliers representing the top 30-40% of emissions.1 Segment and prioritize suppliers Use a dual-lens segmentation model: Effective segmentation frameworks evaluate suppliers on two dimensions: their contribution to emissions (impact) and their willingness or ability to act (maturity). Segmentation enables procurement teams to set tailored engagement strategies: deep co-development for impactful, mature suppliers; capability building for impactful suppliers that are still maturing; and standard tools for the many other suppliers.Incorporate business criticality and risk factors: Go beyond climate impact by considering operational dependency and risk exposure, such as sole-source status or regulatory sensitivity. This ensures supplier engagement also supports continuity and resilience as sustainability risks increasingly carry financial and reputational consequences.2 Launch the programme and set the interaction model Develop a formal engagement plan with clear governance: Launching a supplier engagement programme requires not just good intentions but also structured engagement plans with clear internal ownership, aligned sustainability targets and practical mechanisms for supplier collaboration.17 Secure supplier commitment with clear expectations: Gain early buy-in from strategic suppliers through formal letters of intent or target-alignment sessions, clarifying expectations for emissions disclosure, reduction roadmaps and participation in trainings or pilots. Establish a scalable interaction model: Focus efforts where they drive the most value. Strategic suppliers may get one-on-one support, while others engage through group workshops, knowledge hubs or standard tools, helping teams manage resources effectively.3 Engage with suppliers and explore sustainability levers Co-create decarbonization roadmaps with strategic suppliers: Top-performing companies partner with priority suppliers to develop long-term plans, including targets, milestones and investment plans. These joint efforts foster trust, uncover operational realities and align incentives. Conduct joint workshops to explore category- specific levers: Rather than issue generic sustainability requirements, organize deep- dive workshops by category to identify tailored emissions-reduction levers. Build relationships to encourage innovation and collaborative thinking. Build the business case for each engagement pathway: While engaging suppliers, procurement and finance can work together to assess the cost/ benefit of initiatives to reduce emissions.Secure buy-in from key sponsors to enable supplier engagement: Executive-level backing is critical to unlock funding, mobilize internal resources and send a signal, including the risks of inaction. Incentivize green innovation: This is one of the most powerful levers to drive supplier action, ranging from commercial incentives such as green premiums for low-carbon products to non- commercial incentives such as preferential payment terms or long-term partnerships.4 Green Procurement Playbook: The CPO’s Guide to Delivering Value for Business and Planet 36

Green Procurement Playbook 2025