Chapter 4: Customers’ cooperation key to Flex’s 2030 sustainability strategy

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Editor’s note: Compliance Week’s four-part case study, “Reaching into the value chain: How Flex helps drive sustainability beyond its walls,” is available exclusively to CW members.

A critical prong of Flex’s 2030 sustainability strategy is reducing Scope 3 emissions on the customer side. The global manufacturer pledged 70 percent of certain customers would have science-based targets by 2025. The segment of customers targeted was identified by their emissions covering purchased goods and services, capital goods, and use of sold products.

This is a mighty goal, considering “use of sold products” constitutes the lion’s share of Flex’s Scope 3 emissions annually. In 2021, the category accounted for 93 percent of Flex’s total Scope 3 emissions. “Purchased goods and services” and “capital goods” translated to 6.11 percent and 0.26 percent of Scope 3 emissions, respectively.

The Greenhouse Gas Protocol offers guidance on 15 categories of Scope 3 carbon emissions. According to the guidance, “purchased goods and services” are tangible and intangible products acquired by Flex from a direct supplier each year: materials, parts, office furniture, and IT support, for example. “Capital goods” are physical products owned by Flex—machinery, facilities, vehicles, etc.—used to manufacture customers’ merchandise. Direct emissions from capital goods fall into Flex’s Scope 1 and 2 emissions, but emissions tied to the production of capital goods fall into Scope 3.

Flex is primarily a contract manufacturer, with a finger in every pie. From motherboards to mobile phones to air treatment systems to respiratory equipment, Flex plays an integral role in the mass production of industry-leading products. Yet, it has little control over its inventory of “purchased goods,” which are dictated by its customers. This fact is problematic for a company keen on reducing emissions upstream.

“We could get a bid from a company tomorrow to build something for them where the products are already designed and they have already done a lot of the prework. It makes it really hard to control, long term, your Scope 3 emissions,” said David Gessler, vice president of procurement and supply chain management at Flex.

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