As climate goals become more urgent and regulatory pressures intensify, retailers are at a pivotal moment in their sustainability journeys. Addressing key challenges such as managing supply chain emissions, integrating accurate data and enabling supplier collaboration is essential for achieving meaningful progress.
Tim Weiss, cofounder and chief executive officer of Optera, explores these pressing issues while offering insights into overcoming hurdles and unlocking opportunities in value chain decarbonization. From empowering corporations with actionable emissions data to forging partnerships like the Retail Sustainability Collective, Weiss illuminates how businesses can approach the energy transition with clarity, precision and purpose.
WWD: What do you see as some of the challenges facing retailers and brands in implementing sustainability practices and tracking their progress?
Tim Weiss: The simple answer is supply chain. On average, only 2 to 10 percent of a retailer’s emissions come from its own operations (e.g., electricity use, on-site fuel consumption, company-owned vehicles). The rest is generated by its value chain, including waste, manufacturing and transportation. These indirect emissions, known as “Scope 3,” pose a significant challenge because retailers don’t have direct supplier data and don’t control the emissions from their supply chain or product use.
Without supplier sustainability data, retailers are unable to develop a strategy to de-risk and decarbonize their supply chain. This leaves retailers vulnerable and ill-prepared to address new regulations and the energy transition. When retailers rely on industry-wide average data for their emissions accounting, they can’t determine which suppliers pose the greatest risk and opportunity or which they should prioritize for engagement.
This lack of specific information makes creating actionable decarbonization strategies nearly impossible, much less achieving real results. The sheer volume of partners and organizational silos make obtaining primary data from suppliers a formidable task for retailers. Many suppliers lack the resources to calculate emissions, let alone respond to the dozens of different ESG surveys sent by retail customers.
Uncertainty in trade policy and regulations complicates supply chain planning and may cause retailers to delay sustainability investments, making long-term environmental commitments riskier and less predictable. For example, tariffs could artificially inflate emissions reports that rely on spend-based calculations (as retailers pay more for materials while the carbon output remains the same), resulting in unreliable progress tracking.
WWD: From an operational and organizational perspective, why is data integration such a problem?
T.W.: The problems differ for supplier data and internal data. With supplier data, retailers face incomplete information and difficulties in vetting the data they do have. It is not possible to have comprehensive data across a retailer’s entire supply chain. There are too many vendors, and this information is difficult to collect even if suppliers have the information you need. Retailers are faced with the challenges of using both primary data and secondary data at the same time. For the supplier data you collect, it can be difficult to know how credible or reliable this information is because it is self-reported and may not have third-party verification.
For internal data, retailers are often faced with fragmented systems, siloed data ownership and inconsistent formatting and quality.
The complexity and variability grow when collecting data from hundreds or even thousands of value chain partners at varying levels of climate program maturity. Manual data collection and reconciliation processes add even more hurdles to creating a centralized emissions database with granular figures.
WWD: How would you describe the value proposition of your platform? What are some of the expected outcomes of companies that partner with you?
T.W.: Optera empowers corporations — including retailers — to effectively measure, manage and reduce their carbon emissions across their entire value chain. Our comprehensive carbon management platform goes beyond spend-based calculations, equipping businesses with supplier-specific details to calculate real emissions and unlock progress. Thousands of suppliers in over 25 countries have used Optera’s supplier data collection module to share primary emissions with key corporate customers to date.
Optera’s supplier data collection module.
Specific to Retail, we’ve recently partnered with SPS Commerce to form the Retail Sustainability Collective, which deploys this emissions survey technology across their network to bring supplier-specific emissions data to retailers at scale, using the infrastructure and systems retailers already rely on for supplier engagement.
WWD: Do you think companies can do a better job of reaching their sustainability goals? How?
T.W.: Too many companies are developing sustainability data that has no strategic value to the business. It relies on industry averages and spend-based calculations to determine their emissions. While this is a helpful starting point, it is not actionable or insightful enough to help make progress in de-risking or decarbonizing your value chain. Organizations must mature their climate programs by collecting supplier- and product-specific emissions data. This granular information is where the real opportunity to illuminate change lies. When you can pinpoint which partners or products are generating the most emissions, you can take targeted action and accurately measure the resulting reductions.
Businesses must also work with their suppliers as partners in this journey. We’ve seen the most success when our clients build supplier engagement programs across sustainability and supply chain functions that continually gather data, support vendors’ carbon measurement initiatives, track supplier performance, incentivize reductions and encourage collaboration to reach sustainability goals.
WWD: What other trends are you seeing in the market that is of note from a sustainability/tracking perspective?
T.W.: There are two fundamental forces driving corporate climate action, regulatory pressures and market pressures. These fundamental forces are so pervasive that we continue to see a ratcheting up of ambition for major companies, particularly retailers.
Regulations mandating climate risk disclosure are not in place or progress across nearly every major economy, with these countries representing more than 70 percent of global GDP. Every company of size will essentially be impacted by these requirements directly or indirectly in the coming years.
Market pressure to decarbonize is growing, with investors and consumers increasingly demanding sustainable products and services. Optera’s 2024 Trends in Corporate Emissions Management report found that 76 percent of respondents ranked brand differentiation as a top motivator for reducing emissions.
More than 90 percent indicated that they report emissions either publicly or to regulators and customers. Scope 3 is also becoming a bigger corporate focus. Almost half of those surveyed included value chain emissions in their science-based decarbonization targets, and about seven in 10 are actively working across their value chain to help their suppliers decarbonize.
These numbers are encouraging as the need for dramatic carbon reductions becomes more acute.
