By Stephen Nellis
(Reuters) - Salesforce.com Inc (NYSE:CRM) on Thursday said its supplier contracts will now require companies that do business with it such as airlines to set carbon-reduction goals and deliver products and services on a carbon-neutral basis, making it the latest U.S. company to take steps to address climate change.
Slashing carbon emissions is considered key to stemming global warming.
Salesforce, a maker of cloud-based software for sales, marketing and other professionals, says that one of the largest sources of carbon emissions in its supply chain is the data centers that help deliver its cloud-based software; the company estimates they will account for the equivalent of 267,000 metric tons of carbon in its fiscal 2021.
Another major driver for the San Francisco-based company is business travel, which accounted for 146,000 metric tons of carbon in Salesforce's fiscal 2020, which largely wrapped up before the pandemic.
Salesforce said it is working with the Environmental Defense Fund’s Sustainable Aviation Buyers Alliance, an initiative working to reduce carbon emissions from air travel by promoting investment in cleaner aviation fuels.
“It’s on our radar that we really need to address aviation emissions, beginning right now," Patrick Flynn, Salesforce's vice president of sustainability, told Reuters in an interview. "Salesforce has committed to that from here on out, our air travel-related emissions will be 50% of the intensity of what they were before the pandemic.”
The new contract terms, which Salesforce said it notified suppliers of this week, require suppliers to set "science-based" carbon emission targets, establish a plan for reducing emissions and deliver their services on a carbon-neutral basis, all while submitting to reporting requirements.
The terms require Salesforce suppliers to offset all their emissions involved in delivering services, including the far-reaching so-called Scope 3 emissions, which can encompass activities like business travel or employee commuting.
Companies such as Salesforce and Apple Inc (NASDAQ:AAPL) have called for the U.S. Securities and Exchange Commission to make disclosures of those emissions mandatory.