The challenge of climate change has become a central concern in the business world as extreme weather events continue to impact our planet. Companies around the world are adopting ESG (Environmental, Social and Governance) strategies to avoid even more catastrophic and irreversible consequences for business and society.

Since the last United Nations Climate Change Conference, COP27, held in Egypt, many companies have announced ambitious targets for reducing greenhouse gas emissions and net zero commitments. This is a response to the objective of preventing the global average temperature from increasing more than 1,5 degrees Celsius. The climate challenge is now a priority for companies committed to ESG, as they are aware of the drastic climate changes that are already occurring around the world.

The disastrous consequences of climate instability are visible across the world. A notable example occurred in Maui, Hawaii, where a combination of prolonged drought and extreme winds resulted in the deadliest fire in the United States in more than a century, causing dozens of deaths and billions of dollars in damage.

In Brazil, we are also facing the effects of climate change, including warmer winters and intense rains that have caused floods and landslides in several regions of the country. Studies reveal that the Amazon has become 1 degree Celsius warmer in the last four decades, and cities like Campinas have recorded significant increases in maximum temperatures.

Faced with these challenges, reducing carbon emissions and the impact on the climate have become imperative for governments and companies. It is clear that, to effectively face this crisis, we need to look at the entire value chain and align its goals with companies' emission reduction strategies.

A recent EY study highlights this need, showing that more than 90% of an organization's greenhouse gas (GHG) emissions are related to its value chain. Having complete supply chain visibility allows companies to take effective action, track materials, understand operational processes, collect data for monitoring and implement sustainable measures.

Unfortunately, only half of companies monitor basic sustainability and risk indicators. Digitization and data sharing are essential to improving efficiency and understanding resource usage.

The Carbon Disclosure Project (CDP) Global Supply Chain Report highlights the impact of this misalignment on supply chain management. Less than half of companies reporting to CDP report their suppliers' emissions, and only a third set targets for their indirect emissions (scope 3), which often exceed direct emissions by more than 11 times.

The message is clear: we need to act as a network. All links in the chain, from the extraction of raw materials to the disposal of waste, need to be involved. This means developing products considering their complete life cycle, from production to disposal.

Socio-environmental responsibility involves establishing sustainable relationships with suppliers and other interested parties. It is essential to create internal policies, contractual clauses and evaluation mechanisms, in addition to training programs to reduce emissions.

At Vivo, for example, we involve hundreds of suppliers in our value chain. We implemented measures to reduce direct carbon emissions by 88% and launched the Carbon Program in the Supply Chain. We selected 125 suppliers in carbon-intensive categories and encouraged actions to reduce emissions and use renewable energy.

Our suppliers' involvement is voluntary, but we have seen a significant increase in awareness and engagement. Our goal is for these companies to set their own emissions reduction targets and actively participate in the fight against climate change.

The journey towards sustainability in the value chain is challenging but essential. It helps companies reduce their environmental impact, increase their resilience and contribute to a more sustainable future for everyone. Furthermore, these actions can boost the company's position in ESG rankings and improve its reputation as a responsible business.

It's time to act as a network and involve all links in the value chain in the fight against climate change. Together, we can make a difference and build a more sustainable future for generations to come.