Q&A: Ørsted’s industry-leading approach to decarbonising supply chains | Climate Group Skip to main content
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Climate Group Asia Action Summit

Q&A: Ørsted’s industry-leading approach to decarbonising supply chains

25 May 2023, 15:06 UTC 3 min read

Mie Prehn Nygaard, Decarbonisation Manager, Ørsted

1. How are you taking real climate action by cutting your organisation’s emissions across Scopes 1, 2, and 3?

At Ørsted we have been on a climate journey for over a decade. We used to be one of the most coal intensive power generators in Europe, but we took a strategic decision to become a green energy company, as we were convinced it was the right approach. Today, we’re one of the world’s most sustainable energy companies and a renewable energy leader. Having reduced our emissions intensity in our energy generation and operations by over 87% since 2006, we must now tackle our next decarbonization frontier: emissions from the supply chain – especially those from steel. A task no company can do alone, which is why engaging with stakeholders across sectors, for example in SteelZero is at the heart of our efforts.

2. What are you doing to reduce emissions across your supply chains? How has your business model changed?

To cut supply chain emissions, we depend on the success of our suppliers, and their suppliers in turn, meaning that active collaboration is key. In 2020, we launched a supply chain decarbonisation programme and structurally integrated it into our procurement processes to foster behavioral change in our supply chain. We started engaging with our strategic suppliers representing >60% of total procurement spend and we ask them to report on their emissions, set science-based targets, cover their electricity consumption with 100% renewable electricity and work closely together with them to develop decarbonisation roadmaps. Today 40% of our strategic suppliers have either adopted or committed to a science-based target and 2/3 have committed or already adopted renewable electricity when providing services or products to Ørsted. Building on this success, this year we expanded our 100% renewable electricity expectation to apply to all tier 1 suppliers and developed guidelines to support them.

3. What are you doing to collaborate with others to maximise the impact of your efforts to fight climate change?

Reaching net-zero supply chains is not a challenge any company can solve on its own. Take steel for example, it is not just part of Ørsted’s supply chain but part of many global supply chains. That is why we, together with other leading companies, co-founded SteelZero to pull our purchasing power across industries and to drive market demand for low carbon technologies key to decarbonise. In cross-sector collaborations like SteelZero we send a clear signal to the market that we are seriously committed to reaching our net-zero target by making future procurement pledges together with other companies.

4. What do you want to get out of the Asia Action Summit this year?

Conferences like the Climate Group Asia Action Summit is pivotal to bring together businesses and governments to speed up the renewable energy build-out and drive decarbonisation of hard-to-abate materials such as steel. Together we have the opportunity to break barriers for the energy transition and develop policy recommendations and frameworks that can incentivise investments in low carbon technologies. This is particularly needed in the APAC region where the renewable electricity penetration is at relatively low percentage. Here partnerships will play a key role to drive down the cost of renewable energy and decarbonisation of supply chains, something my colleague and Head of Ørsted’s APAC procurement Pascal Langeais will focus on in his participation in the panel on “Making the market”.

Join Ørsted’s Pascal Langeais at the SteelZero Summit, as part of the Climate Group Asia Action Summit, on 8 June. Register now.

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