As part of their larger sustainability goals, resorts are improving their procurement processes with the aim of reducing their indirect, i.e., scope three, carbon emissions. As ski areas increasingly develop sustainability goals and focus on reducing their carbon emissions, the collective effort to investigate scope three emissions—those that take place off site—is gaining traction across the industry. Resorts seeking to amplify social and environmental responsibility efforts will find enormous opportunity in their supply chain and procurement strategies. Supply chains are fragile networks, especially when the goods and services at play are specialized to meet the needs of a niche industry. By monitoring and evaluating their supply chains, resorts can better manage the process, mitigate disruptions, and—when explored through a sustainability lens—support carbon reduction goals. Only a small portion of our impact on our natural resources is directly related to activities at the resort. Indirect impacts from the supply chain—such as retail, for example—are 11 times greater than those caused just by carrying out the retail operation itself. In food and beverage, supply chain impacts are 24 times higher than those coming directly from dining operations. When you start to consider all the opportunities to increase efficiencies in these indirect areas, such as optimizing delivery routes and consolidating shipments, it really adds up. Here, we take a closer look at supply chain impacts and the ways in which resorts are revamping their procurement processes to reduce indirect, i.e., scope three, carbon emissions. SCOPE THREE EMISSIONS Greenhouse gas emissions are categorized and calculated as scope one, two, or three. Scope one emissions come directly from your facility, including fleet vehicles or the fuel used to heat buildings. Scope two includes emissions from electricity purchased from your utility, as well as solar. Scope one and two emissions are considered direct because they are uniquely tied to resort operations and can be adjusted internally. A company can make efficiency upgrades to lighting, snowmaking systems, and vehicles, for example. “A lot of people have tunnel vision when it comes to sustainability efforts,” says Erika Kazi, a sustainability consultant and vice president of sustainability and social impact for ski school software company flaik. Carbon accounting efforts tend to be narrowly focused on direct emissions and often do not consider supply chain emissions—much of which fall into the scope three category. Indirect emissions. Scope three includes carbon emissions from everything else, and it accounts for a far larger percentage of emissions than scope one and two combined. Scope three includes staff commuting to work, guests traveling to your resort, delivery trucks dropping off your goods, and even the lifecycle of the products you use, a.k.a. your supply chain. According to a McKinsey & Company analysis of sustainability in supply chains, more than 80 percent of greenhouse gas emissions in most consumer goods categories are in scope three. “That’s where you can really reduce emissions on a broader scale and with more significant impact,” says Kazi. “If we’re just focusing on planting trees or offsetting emissions through renewable energy credits or offsets, we’re only addressing the part of the iceberg we can most clearly see.” Think of supply chain emissions as an iceberg: scope one and two (on site emissions) are the smaller part of the iceberg we can easily see—but scope three (off site) emissions are a much bigger part of the story below the surface. KNOWING THE GOODS The McKinsey analysis reports that less than 20 percent of companies have a comprehensive view of their supply chains’ sustainability performance, and only 25 percent currently engage with their vendors to address emissions. Where cost was once the main driver of purchasing decisions, resorts are now recognizing they can engage with vendors to source products that also reflect their values—meeting criteria for longevity, disposal, substitution, and price. The biggest step is developing specifications and processes for goods and services that incorporate your values and goals, according to Chris Vanderbilt, vice president of procurement for Garden for Wildlife, a program of the National Wildlife Federation, and former director of procurement for Alterra Mountain Company. “It all starts with developing out what you want to do for sustainability, and then baking that into your specifications before you go out to bid,” he says. Are you looking for products that are recyclable, reusable, or that can be repurposed? Are you looking for local or diverse suppliers? Ask your vendors if they can help. Cost considerations. “From a resort perspective, there are two pieces to the purchasing decision,” says Aspen Skiing Company (ASC) director of purchasing Shana Miller. “How do we do this operationally, and how do we manage it from a cost perspective?” Miller admits there was a lot of internal conversation around the cost difference between plastic and compostable forks at ASC. Taking a more holistic look into the lifecycle of these items, she identified an overall savings in switching to compostables. “It is less expensive to haul compost to the landfill than it is to haul waste,” she says. Further, she adds, “We’ve always decided that compost is what’s right and in line with ASC’s culture.” Once you know what you want to buy and the type of vendor you want to buy from, your vendor pool will narrow down and give focus to your solicitation process. PRO-SUSTAINABILITY SOLICITATION PROCESS It is possible to work with your vendors to develop strategies together that can benefit both businesses. “By developing a relationship with your vendor, you can hold both sides of the table mutually accountable to meet your goals,” says Vanderbilt. Sustainability is increasingly at the forefront for vendors, too, and they have begun anticipating questions you might ask, Vanderbilt adds. “Questions like: ‘How sustainable are you? How sustainable is your supply chain vertical? What impact do you have on the environment, and how are you mitigating that?’ are almost expected now,” he says. Asking questions like these signals to vendors that you have sustainability requirements, and will also help advance the entire industry by establishing those expectations, Vanderbilt suggests. Finding the right partners is a process. “I usually start the conversation by talking about who we are as a business and about our sustainability and DEI goals, and then allow vendors to match where they fit in,” says Miller. This approach has led her to notice a shift where “vendors who know us well understand that we lead with sustainability, and they bring that to the conversation. A lot of the vendors we have partnerships with are also pushing forward with the same sustainability initiatives.” Vendors can also provide valuable feedback about the feasibility of your goals. “If your business has a really aspirational sustainability goal, you want the vendor to meet it,” says Vanderbilt, “but you also want the vendor to provide an opinion about whether that pursuit is within the realm of reality, or if there’s another way they can work with you to meet it.” Moving the needle. Companies can apply a sustainability-forward solicitation process to just a handful of vendors and still move the needle on climate goals. While forming vendor partnerships, you can leverage your spend to drive partners toward more sustainable action. Certain supplies are more vulnerable to climate. Forming partnerships with several vendors who take these vulnerabilities into account spreads out your risk as a buyer while still giving those vendors enough of your business to make the relationship mutually beneficial. Vanderbilt recommends developing a tiered supply chain management strategy that allows you to remain relevant to each vendor. “Money really speaks,” he says. To that end, Kazi advises, “If you have a net-zero goal or another environmental responsibility goal, link-in supply chain [goals], have those conversations, and use your purchasing power” to influence vendors. ALL ABOARD! Procurement conversations need to happen at the highest levels of an organization’s leadership. “We are no longer in a just-in-time delivery environment where there’s an overabundance of stuff,” says Vanderbilt. “Companies that don’t incorporate their procurement lead in c-suite-level conversations are going to get left behind.” This can be a stumbling block, according to Kazi’s research, which indicates that one of the biggest obstacles to reducing climate impacts is getting leadership on board with scope-three mitigation objectives. Guiding staff. Additionally, few procurement staff are experts in sustainability. “That was a big need that we had to fill,” says Krista Record, Alterra Mountain Company enterprise procurement manager. “Our sustainability teams are relatively new. They are getting up to speed with how each resort [in the portfolio] is working to reduce their carbon footprint and to understand how that lends to the larger picture at Alterra.” To change the way staff think about how they make purchases and develop relationships with vendors, leadership at Arapahoe Basin, Colo., established a companywide policy. “For a long time, we’ve had a purchasing policy that allowed us to spend up to 10 percent more on environmentally or socially responsible products without any additional approval needed,” says A-Basin sustainability manager Mike Nathan. “Our middle and upper-middle managers took that policy and ran with it and found vendors that fit the bill and that they are excited to work with.” Similarly, at ASC, Miller says, “Sustainability is so ingrained in our culture at this point that a lot of the decision-making has moved beyond the purchasing relationship or the sustainability department, it’s something our management teams keep at the forefront.” YOU CAN’T MANAGE WHAT YOU DON’T MEASURE Beyond building a culture that empowers sustainable purchasing decisions, resorts are taking a more intentional approach to understanding—and improving—their supply chains’ sustainability performance. A-Basin, for example, is developing a centralized procurement plan that leans on technology to collect data, which will eventually help vet vendors and inform purchasing decisions. “This tool will allow us to gather some baseline information from suppliers and service providers about their environmental performance, social impacts, whether they are a local company, whether they have representation in management from equity-seeking or underrepresented groups,” says Nathan. “Then, our goal is to start defining what a responsible vendor is and gradually shift more of our purchases to meet our goals.” Alterra is also working to track which vendors meet purchasing and sustainability needs across the enterprise. Alterra’s resorts have varying geographic and logistical constraints, so they have to find suppliers who can meet the needs of individual resorts, each on a different scale. “We have to balance the needs of working with those vendors and what’s available to resorts in those remote locations,” Record says. Utilizing technology. Resorts can begin incorporating data into their purchasing strategies by using currently available technology. “I rely on vendor platforms to help me manage to sustainability and DEI,” says ASC’s Miller. “We have the option with a lot of suppliers to pre-create a catalog or select that we prefer to work with vendors that meet certain goals. “Since we have so many different outlets, this allows me to have a soft hand in decision making and still influence who our employees can do business with,” continues Miller. “For example, when we set up purchases for items like copy paper, we automatically set them up on contract for a recycled option. So we’re able to manage a lot of that behind the scenes, and it creates an easy decision for our staff.” A SNOWBALL OF CHANGE By taking steps to address supply chain impacts on carbon emissions, ski resorts can give vendors a chance to test breakthrough technologies and alternative products, as A-Basin has seen. “We get approached all the time by companies that are making new ski wax that’s biodegradable, or a company that’s making ski poles out of reused aluminum and also providing a recycling option for when they are at the end of their life cycle,” says Nathan. When suppliers make shifts to become more sustainable by reducing their own scope one and two emissions, it not only reduces a resort’s scope three emissions, it also has ripple effects. “If I can help [a supplier] find more sustainable technologies or resources, that’s where a real difference can be made,” explains Kazi. “If they change their behavior, it’s going to impact all the other organizations they are supplying as well.” Consumer impacts. Additionally, resort guests are often early adopters and quick to pick up on trends they encounter at the mountain, so carbon reduction efforts that are customer facing can amplify the long-term benefits. “At ASC, we have influential guests,” says Miller, “so the more they see what we are doing, the more opportunity we have to create a snowball of change beyond our industry.” Customers who ride an electric shuttle may start researching EVs back home. Separating waste in the cafeteria might get them thinking about their household trash. They might also think differently about the things they purchase. “We choose to carry retail products such as apparel that is high quality, that will last, and that doesn’t come wrapped in plastic,” says Nathan. “That stuff totally drives why we buy it and why we wear it.” All of these efforts add up. “If somebody along the supply chain wins, we all win, because we’re all trying to provide an excellent guest experience and we want the ski industry to flourish,” says Vanderbilt. RESOURCES FOR PROCUREMENT PROFESSIONALS Procurement professionals will find a wealth of information and support through industry and professional networks. Resorts can reach out to a local Institute for Supply Management (ISM) chapter. NSAA’s Procurement Committee is another resource. “Any time you have that connection to peers in your industry that are also in your field is beneficial,” says Aspen Skiing Company director of purchasing Shana Miller. Erika Kazi, vice president of sustainability and social impact for ski school software company flaik, has a sample procurement policy and a list of action steps available to share as well. Reach her at email@example.com. Stay tuned for more sustainability and supply chain management content from SAM, being developed in partnership with flaik.