Use the 'Supplier spend optimisation' scenario model under 'Reduce emissions' to forecast the impact of switching from a high-emission supplier to a lower-emission supplier, or reducing spending with high-emission suppliers. Your supply chain is often one of the biggest contributors to your total emissions. By switching to suppliers with a lower carbon intensity or optimising how much you spend with them, you can:
Reduce Scope 3 emissions significantly.
Identify the cost or savings per tonne of CO₂e reduced.
Evaluate the trade-off between environmental gains and financial performance.
How does the 'Supplier Spend Optimisation' scenario work?
This scenario simulates the carbon and financial impact of switching from a high-emission supplier to a lower-emission supplier or reducing spending with high-emission suppliers. Using emissions from spend data (uploaded under Purchased goods and services) and customisable scenario filters, it allows you to compare current emissions with those of potential alternative suppliers.
Please note that uploaded spend data must include a supplier name for the supplier to appear in this scenario model.
For modelling purposes, we assume that 100% of the supplier change takes place during the base year. The full financial and carbon impacts of the initiative are then reflected from the beginning of the year following the base year. This means that all cost changes, revenue differences, and emissions reductions are applied as if the transition is fully implemented by the end of the base year. In future, we will update the time ranges changes be applied to.
'Supplier Spend Optimisation' filters
Adjust the scenario filters below to reflect the data for an alternative supplier. Once applied, you can save this view for future use.
Input | Description |
Base year | The reference year for your calculations |
Supplier to replace | The name of supplier you are replacing |
New supplier | The name of the supplier you are switching to |
New emission factor | The emission factor of the new supplier. (Default shown and should be adjusted to reflect real data) |
Price difference | How much the new supplier charges compared to the old supplier |
Switch percentage | Percentage of the old supplier spending to switch to the new supplier |
Growth/reduction rate | Annual percentage increase or decrease in supplier spend |
CAPEX (EUR) | One-off capital expenditure for the change |
Revenue difference (EUR/year) | Additional or reduced revenue generated after the change |
OPEX difference (EUR/year) | Operational cost change after switching suppliers |
WACC | Weighted average cost of capital, used for discounting cashflows |
Project duration | How long you expect the scenario to run |
Include Terminal Value | Whether to calculate value beyond the modelled period |
Perpetual growth rate | Long-term growth rate for terminal value calculations |
What insights can I get from the 'Supplier Spend Optimisation' scenario?
Once your filters are applied, you’ll see forecasted carbon and financial insights. Reviewing both perspectives helps you assess whether switching suppliers or adjusting spend is the right move and provides the data needed to build a strong business case for stakeholders.
Metric | What it shows | Why it matters |
New supplier spending after action | Estimated spend with the new supplier | Understand immediate financial impact of switching suppliers |
Spending difference | Change in spend compared to current supplier | Evaluate cost savings or increases from the action |
Total spend after action | Total projected spend including changes | Plan overall budget after supplier adjustments |
Total change in costs | Combined impact of spending and OPEX differences | Assess overall financial effect of the initiative |
Cashflow (EUR) | Net inflows/outflows each period, including CAPEX, OPEX, and revenue changes | Manage timing of costs and benefits for better financial planning |
Discounted cashflow (EUR) | Cashflows adjusted for time and risk | Compare projects on a like-for-like basis by present value |
Terminal value (EUR) | Long-term value beyond modelled period | Capture enduring financial benefits of supplier changes |
NPV (EUR) | Sum of discounted cashflows + terminal value | Determine if the initiative creates or destroys financial value |
Payback (years) | Time until cumulative discounted cashflows turn positive | Assess how quickly investment recovers initial costs |
Old supplier emissions before action | Baseline carbon footprint of current supplier | Benchmark current emissions for comparison |
New supplier emissions after action | Projected carbon footprint with new supplier | Measure potential reduction in carbon emissions |
Difference in emissions | Change in emissions from switching suppliers | Quantify climate benefit of the initiative |
Total emissions after action | Projected total emissions after supplier change | Understand the new overall environmental impact |
Please note: Not every decarbonisation initiative will lead to immediate financial savings, and that’s perfectly normal. The goal of this feature is to bring transparency to both the climate and financial implications of your actions. By calculating the cost per tonne of CO₂e reduced and projecting long-term impacts, it empowers you to compare alternatives and make informed, strategic decisions. Decarbonisation is not just a cost, it’s an investment in the future resilience of your business.