What does it take to decarbonize a global supply chain in banking? As emissions reporting grows more complex and sustainability standards tighten, financial services leaders are redefining their supplier engagement strategies to meet ambitious climate targets. Tune in as experts uncover how purpose-driven innovation, AI, and supplier collaboration are enabling banks to build resilient supply chains and drive progress on net zero goals. Featured experts Jenny Pickett, Head of Sustainability for North America, Lloyds Bank Faith Taylor, SVP & Global Citizenship and Sustainability Officer, Kyndryl
What does it take to decarbonize a global supply chain in banking? As emissions reporting grows more complex and sustainability standards tighten, financial services leaders are redefining their supplier engagement strategies to meet ambitious climate targets.
Tune in as experts uncover how purpose-driven innovation, AI, and supplier collaboration are enabling banks to build resilient supply chains and drive progress on net zero goals.
Featured experts
Jenny Pickett, Head of Sustainability for North America, Lloyds Bank
Faith Taylor, SVP & Global Citizenship and Sustainability Officer, Kyndryl
Sarah B. Nelson 00:02
Hi there. I'm Sarah B. Nelson, Chief Design Officer for Kyndryl, and welcome to The Progress Report. Hot off the stage at Climate Week, we have some fantastic guests today. I'm excited to have you here. Welcome, Jen.
Jenny Pickett 00:12
Thank you.
Sarah B. Nelson 00:13
And welcome, Faith.
Faith Taylor 00:14
Thank you.
Sarah B. Nelson 00:15
Jen, what is your role?
Jenny Pickett 00:17
So, I am the Head of Sustainability for North America, for Lloyds Banking Group. Lloyds Banking Group is the biggest financial services provider in the UK, so one in four people bank with us. We have a huge retail bank, we have a corporate and institutional bank, which is where I sit in our sustainability team. And we also have a pension arm and insurance arm as well. So we're a big beast, but I've recently just come over to New York. I've been here for a week.
Sarah B. Nelson 00:44
Welcome.
Jenny Pickett 00:45
And I'm here to head up the sustainability proposition over here.
Sarah B. Nelson 00:50
Great. Well, welcome to the city.
Jenny Pickett 00:52
Thank you.
Sarah B. Nelson 00:52
And then, Faith. Tell us about you.
Faith Taylor 00:55
Well, I'm Senior Vice President of Global Citizenship and Sustainability for Kyndryl. I've been here almost four years, building the program from the ground up, so it's been an incredible journey, and we hosted Climate Week with the growth and purpose summit.
Sarah B. Nelson 01:12
Great, excellent. So we're going to talk a lot about supply chain today. I had this moment when we were first talking about this, where I thought supply chain and financial services. What is it? What is it? So, what can you tell me?
Jenny Pickett 01:27
So I can tell you that our supply chain is very big and complex. So like many institutions, many organizations, supply chains aren't simple. We have over 2,500 suppliers across so many different sectors. If you think about a banking group like all the different services, the materials, the resources, the tech that we need. So the biggest sectors, from a supply chain perspective for us, are tech, as you would imagine, building and construction, courier services and then professional services. So lawyers, accountants and consultancy services. And as part of our sustainability supply chain work, we are actively engaging with 80% of those suppliers from a carbon emissions perspective. So that actually means that we are engaging with around 170 businesses.
Sarah B. Nelson 02:18
Which is really complex, I imagine.
Jenny Pickett 02:21
Yes, of course, covering all those different sectors. So, they're very nuanced. They have their own different maturities when you come to think of sustainability. So, it's how can we support and work with them and collaborate with them, to support them on their journey, and to help them align to the goals that we ultimately are trying to target and focus on? Because we've set ourselves a number of different commitments. Our first public commitment was in 2022 and that was to be net zero by 2050 or sooner within the supply chain. And the interim target is to reduce our emissions by 50% across scope 1, 2 and 3 in the supply chain by 2030.
Sarah B. Nelson 03:00
Okay, so big.
Jenny Pickett 03:02
Yes, a big goal for us there, yes.
Faith Taylor 03:05
And we're one of your suppliers.
Jenny Pickett 03:06
And Kyndryl is one of our suppliers.
Sarah B. Nelson 03:08
Yeah.
Jenny Pickett 03:09
So Faith, tell me, how is it from your perspective?
Faith Taylor 03:12
Well let me say this. Lloyds is one of the most advanced, and you have to be proud. You have an Emerald program where you require us to share our net zero goal. You like to know if we have a science-based target initiative, certification, validation, you ask about the EcoVadis score, and you get a score for doing that. But then also, not only, you know, going through that process, but you have someone actually work with us and talk about our supply chain and how we supply the information to you. Not all of our customers are doing that, but you're actually doing that, so it's great.
Jenny Pickett 03:52
Yeah, and we really do have a huge focus on our supply chain. So when we think about the banking group from a sustainability perspective, we really do have a big focus on our suppliers, and how do we ensure that they are coming on the journey? You know, it's part of our scope 3, it's really important. And so we have 12 dedicated sustainability individuals within the supply chain team who actively engage with the suppliers. And it's funny, you mentioned the Emerald Standard. So, the Emerald Standard we launched in 2022 and that was our sort of sustainability framework for suppliers with the different requirements that you've mentioned. And next year, we'll be launching Emerald Standard version 2.0 so watch this space.
Faith Taylor 04:36
The bar is being raised.
Sarah B. Nelson 04:40
It's interesting thinking about collaboration and the ecosystem, because that was one of my questions is, how do you move beyond just a commitment to achieving something into the actual action?
Jenny Pickett 04:51
So I think that really does move back to our Emerald Standard. So as Faith just went through, we have four different sustainability requirements. And we're launching a new version of that, which will have new different types of commitments and requirements as well.
Faith Taylor 05:05
So when you talk about metrics, and you have goals, and they call them indirect, direct, and in your supply chain, carbon emissions. And today, you can sign up for, like we were saying, 50% down by 2030. That's what Kyndryl has. Or by 2040 will be 100% down. And you do this, what they call scope 1, direct, scope 2, indirect. And then your supply chain, which is scope 3, which is, you know, or your value chain, which includes quite a few categories, right? 15 categories, everything from purchased goods and services all the way to employee commute, business travel. So it's pretty extensive, and when you look at that, you know, you set those goals. So to be down by 50% 2030, you actually have to calculate those emissions.
Sarah B. Nelson 06:02
Do you ever have the vendors like working with each other? So, if they're in, or I know they're often competitive, but are they, when working in a similar sector, is there like any sort of connections that you draw between them that they can help each other?
Jenny Pickett 06:13
We really do try to foster innovation and best practice and learning across suppliers. So we also do ad hoc workshops and round tables, so that will be bringing across different experts, people, suppliers, learning best practice from one another, also partnering with third parties. So we've partnered with EcoVadis, we've partnered with CDP, who've come performed webinars. We've asked our suppliers what help they need, and what came up, which is not surprising, is carbon accounting, a bit like what Faith was touching upon a minute ago, net zero target-setting. So we've paid for EcoAct to come and support and help our suppliers. And an example, which was quite nice, that where we worked and collaborated wine of our suppliers was back a couple of years ago. So we we partnered with Wates, who's a leading construction business in the UK, and we wanted to support sustainability experts that were new in the space trying to create decarbonization solutions within buildings. And so together, we decided to launch a nationwide competition. And there were five winners, and there were hundreds and hundreds of companies that entered it, all of these, you know, entrepreneurs, SMEs, who are just starting up their businesses. And the prize was that you then got to become a Lloyd's Banking Group supplier. You got a share of 150,000 pounds, and then Wates would also then market your products and services to their wider network as well. And there was a real selection of winners and things they had produced. So one was a zero emissions boiler. One was an air powered shower. So lots of different solutions, but, yeah, that was an exciting sort of collaboration of working with our suppliers to try and support that space.
Sarah B. Nelson 08:11
Okay, so these initiatives that you're talking about are really like they're in addition to sort of building this robust supply chain for Lloyd's, you're also building economic opportunities for the rest.
Jenny Pickett 08:23
Yeah, and I think, you know, we said this on the panel, like, collaboration is key. You know, from a sustainability standpoint, we've all heard this. No one person or one organization is going to do this alone, so we need to collaborate and work together. And you know, it really is front and center to our supply chain work is collaborating with our suppliers, and I think that is a really nice approach that we have, and I think that is recognized by our suppliers, that we're wanting to work with them and support them. It's amazing the different free resources that we give to our suppliers, and even just thinking about what we're looking to do going forwards, I'm going to use the word AI. So, you know, we're wanting to integrate AI into our supply chain work going forwards, and one of the reasons for what we're hoping to achieve is to even better understand our suppliers, so we can create more tailored support and resources for them, so we can group them and understand where they are in their journeys versus one another. You know, what kind of hot spots or what challenges are they experiencing? So then we can put them into different segments to then create that tailored approach. And we're hoping to use AI to really amplify and help us do that more efficiently.
Sarah B. Nelson 09:35
Faith. I'm curious about, and now I'm sort of also curious, as a supplier, what is your experience?
Faith Taylor 09:43
So it's it's interesting, because we continue, you know, if I look at our customer base and the amount of questions that we have around sustainability, and we look at our RFPs, RFIs, just in last year alone, we had over 400 requests, and the billions of dollars in terms of total contract value, and they're asking everything around sustainability metrics, what are your climate risk plans, all of this. And so we see the real business value of why customers are asking for this. What's interesting in terms of our suppliers, we work with the Responsible Business Association, RBA, to actually outline and use their framework to manage our suppliers, and it's an industry best practice in terms of that management framework, and our procurement team has been using that to actually look at our supply chain of over 4000 suppliers to say, how do we prioritize them, how do we rank them, and do they even have, let's say, a code of conduct for how they should actually manage their supply chain? So we use those types of vehicles in terms of managing the process. What's also really interesting is that Lloyds is probably one of the best in terms of your Emerald program.
Jenny Pickett 11:07
You have to say that.
Faith Taylor 11:08
She's like, "what?" I'm being honest, because we don't get asked that level of detail from all of our suppliers, but we understand the value, because, as we say, we're part of each other's scope, right? If I'm going to reduce my, you know, purchase goods and services, I have to look at the suppliers in there, and I have to ask you, okay, how much are you reducing your emissions by? Am I going to get my emissions or are your emissions all increasing? Yeah, we don't have a value proposition. We have a problem. So we really have to. There's this whole monitoring system of, how do you look at your supply chain and where the emissions are coming from? And yes, this is where AI is being used, right? You're looking at the data. Data is king here, and we have to report on that data, and making sure that that data is accurate is a big issue. Let me be honest with you, because they come from so many sources. So as we develop it, we're saying, okay, how do we have data integrity if we have to report on it, right? Is it auditable data? Are their emissions going up or down, which then is included in our emissions? You can imagine how complex and complicated this is. So this is why everyone has been like, "Oh my God, this area is hard." And we're trying to leverage AI to help us with the analytics, the understanding of the information so that we can report on it, okay?
Jenny Pickett 12:45
Such an interlinked ecosystem, basically, it really, really is.
Sarah B. Nelson 12:49
Yeah.
Faith Taylor 12:49
Yeah.
Faith Taylor 12:50
And this is where the rubber hits the road. People are like, "I have to tell you how much money I'm spending to do this?" Let's be real. You know what I mean? It's not easy. This was really hard because, you know, 4000 suppliers, that it's not my business, but I got to go to you and say, you know, you got to lower your emissions. So what do you have to, you know, get them to do that? So this is why so many companies are like, "Oh my goodness, how do we do it? How do we work together?" And at the end of the day, that's where, like, can AI help us get to the information? There's a lot of double counting, right? If I'm part of her supply chain, you're part of my supply chain. Where do we figure out who owns what in the data? And that's where you have a lot of countries and companies and regulations challenging. Is this really good information, is this really not double-counting? And I think that's the opportunity for AI to define that. So we have a long ways to go in this area.
Jenny Pickett 12:50
And it's interesting what you say about the requirements, because we're launching our new set of requirements next year. So in line when we issue our annual report and our sustainability report, which is in Q1. Will be Q1 2026. We're looking to do Emerald Standard version 2.0 as I mentioned. And you know, when you're sort of saying that we're more advanced with the questions and things that we're asking you, it'll be really interesting then going forwards, how it's perceived by our supply chain, because, you know, it's going to be taking a step up. So we, the Emerald Standard, was very focused around ambition and disclosures, whereas our new version 2.0 is all about action. It's great that you have the ambition. It's great that you have, you know, your potential strategy, but how are you actually going to deliver on that? What is your transition plan to deliver your strategy and your ambition? What capital do you have allocated to deliver it? What accountability is there in the business? Is it embedded in exact renumeration?
Sarah B. Nelson 13:46
And also, don't forget, like we've actually just been mainly talking about emissions.
Faith Taylor 14:14
I know. Water, waste, you know what I mean? And we're gonna be like, "Okay, water in your supply chain. Okay, explain that to me." You know what I mean? So, you know, we're really gonna have to have a way to figure out who owns the different components of this, and then where are the reductions actually occurring and there's a lot of work to be done here.
Sarah B. Nelson 15:18
Yeah.
Jenny Pickett 15:19
Yeah. Because we're, you know, thinking of those other topics, we're actually doing a big piece of work at the moment on nature.
Sarah B. Nelson 15:24
I was just gonna ask, nature.
Jenny Pickett 15:26
Nature and our supply chain.
Faith Taylor 15:27
Oh my goodness.
Sarah B. Nelson 15:28
And I'm sort of curious how you build. I mean, how do you build? Like, how do you build in this kind of nature? Yeah, nature and the unpredictable into I mean, I guess some predictable, but like weather or how do you build that into this giant, complex system.
Jenny Pickett 15:47
I could tell what we're doing on nature. So we were at the beginning of our journey when we think about integrating nature into the supply chain work. And we did a materiality assessment of our medium and high impacts and dependencies on nature in our supply chain, and we only did that at the beginning of this year, and we're currently undergoing a nature pilot as a result of that analysis that was done. So that analysis, which we did using the ENCORE tool, which gives you high-level information around your impacts and dependencies, highlighted different priority sectors, and then, as a result of that, there's three different sectors which we've decided to roll out the nature pilot with. But we're sort of saying to those suppliers, you know, where are you in your nature journey? How can we think about our Emerald Standard and incorporating different nature requirements? How can we support you in that process? You know, we do. It's going back to that collaboration point, like we need to work with our suppliers on this. So that's something we're currently looking at the moment. And, you know, with carbon emissions, there's one metric, and it's the same, you know, carbon emissions in one country versus another country, but nature is completely different. It's so location specific, so the nature and the habitats in one area will be completely different to another area. So you know, how do you work with suppliers to support them with what could be very different sort of challenges, opportunities and issues from a nature perspective? It's definitely has more complexity to it than carbon.
Sarah B. Nelson 17:22
Yeah
Faith Taylor 17:22
To me, when I look at this, I think that we're really on this journey of, how do you quantify? Like you said. And what was interesting is putting a value to these nature resources, putting a price. So now they're starting to look at that as a vehicle to actually quantify whether or not this is a value or not. And you know, at the end of the day, if you don't have a price, you're not valuing it. So this is an evolving space, but you're starting to see countries start to implement this. Yeah, it's going to be interesting, because it takes it away from a regulatory conversation to a value, business value conversation. And so hopefully that will be another mechanism to be able to quantify the benefits of these natural resources, and then we could say, what's the ROI of usage or not?
Jenny Pickett 18:11
It's fundamental, and it's just been taken for granted. So, you know, so many companies are completely unaware of their impact and dependencies on nature, but you know, the minute they didn't have them there, the fundamentals of their business wouldn't be able to operate.
Sarah B. Nelson 18:24
Yeah, you know, one of the things that makes me think about, and in the world of design, design thinking, there's this whole, "How might we?" question, and there's like, an innovation. It's like, what is new? What what could we do? And I feel like that the one of the questions that I see sort of coming in. It's, "How might we and what is the price of how might we?" So, how do you actually, not only develop new ideas, but to actually intentionally put in, what is the impact of that idea, so that it's not like, "Oh, we had this consequence." Social media. We have this consequence way down the side, but you're that intentional. What is the price? And that could be the impact on business, but it can also be the impact on nature. It can also be the impact on people and society and planet. And I think putting that, and making visible that rigor into it is, I think, a huge part.
Jenny Pickett 19:15
I think it's all that circular economy piece, isn't it? Life Cycle, like when you think of a new product and you innovate something, or even one that's existing, have you thought about all the different steps and the different impacts that you have across all the journey? Like how you're sourcing it to the ultimate end point? How is it being disposed of? How can it be reused? How can it be recycled? So, you know, it's thinking of that circular economy piece.
Faith Taylor 19:39
They're saying, we're not going to solve this unless we incorporate circular economy thinking, right? Yeah, so every new product, why can't it be sourced from something that's already exists, versus taking away from natural resources?
Sarah B. Nelson 19:53
Well, it's interesting too. Is that, you know, I always think about, when I think about impact, we have this way of evaluating concepts, right? Is it viable for the business? Is it feasible technology wise? Is it desirable for people? But then this responsibility that has to go on. Responsibility, and the way I think of it is people, society and planet. But I'm also thinking, in this case, that we're also thinking about human sustainability. So I'm curious how you're thinking about what that means.
Faith Taylor 20:21
We're the people implementing these solutions, so we are directly impacted by our businesses, our communities. And so when I think of, you know, I put it around the concept of compassion, having compassion for your planet, that you care for your planet, you care for your people, you care for your society, but when you think about it, it's all interconnected, and you cannot solve without including people who actually consume, develop and live, work and play in this ecosystem. So to solve for it, you cannot solve for it without human-centric design thinking, integrated thinking. And I truly believe that because of the internet, because we're globally interconnected, we can see this every day, today. And so, you know, when there's the wildfires, we're in New York City. Canada, remember? Yeah. This right here, the winds blew in, and we were having smog, it was red and people were like, "What's going on?" Because we're globally interconnected. So at the end of the day, that was called by and caused by what, you know? So, at the end of the day, when I look at how we solve for this, it has to include people, and we have to understand how we can leverage technology and the knowledge to solve for it. So you cannot do it in a vacuum.
Jenny Pickett 21:59
And it goes back to collaboration, doesn't it? Yeah, collaboration is really key. Yeah. As part of all of this.
Sarah B. Nelson 22:05
We like to finish the podcast with a question. So what does progress look like?
Jenny Pickett 22:13
Progress in our supply chain? Well, firstly, we have those public commitments, so let's hope that we're further advanced on those.
Sarah B. Nelson 22:21
Emerald 2.0.
Jenny Pickett 22:23
The launch of Emerald 2.0, that that's launched successful, that suppliers are working with us, that we're able to support and help, actually, suppliers transition further on their journeys to put in place those credible transition plans to have that capital allocated, to have it, the accountability, throughout their organizations. And I think it's that we, you know, leverage AI to support us to create that more tailored approach and support suppliers. And ultimately, let's get that robust and resilient supply chain that whatever the disruption, which unfortunately, we know there's going to be more disruptions, more that we can't tell what they're going to be now, we can't predict them. We can't foresee them. But how, when those happen, are we able to ensure that the supply chain keeps functioning?
Faith Taylor 23:07
I think progress, as you said, is all about making sure that we're delivering on the commitments that we said, right? But I think progress is also very personal. Can I see that when I use a product or service that it is totally regenerative? Can I see that when we develop solutions for our children, that they have a future where they're living and are employed with AI in a way, that's economically viable, that's sustainable, that's safe and secure. And so when I think of progress, I think of, okay, we have these immediate goals, but can we look back and say that what we built is something that our children and our grandchildren and society can live with, and we made it better? Yeah, we made it a better place. To me, that's progress. So, I kind of have, today, where are we going after? And what can we try to build for the future?
Sarah B. Nelson 24:12
Yeah, I feel like we could talk about this all day. I'm so excited. I'm so happy that we got to sit here and really kind of,
Jenny Pickett 24:20
Discuss it together.
Sarah B. Nelson 24:22
Discuss it together.
Sarah B. Nelson 24:23
Yeah.
Faith Taylor 24:24
Thank you.
Faith Taylor 24:24
Thank you guys.
Sarah B. Nelson 24:25
Thank you, Faith, and thank you, Jen, for joining us on The Progress Report today. And I hope that we can have more conversations about this.
Jenny Pickett 24:32
Thank you.
Faith Taylor 24:32
Thank you.