In this episode of the Sustainability Spotlight series, we are thrilled to welcome Sue Ann, Vice President of ESG at DXC Technology. Sue Ann shares insights on navigating the complexities of ESG disclosures, tackling the challenges of measuring Scope 3 emissions, and setting Science-Based Targets Initiative (SBTi) approved reduction targets.
Eliana: Sue Ann, thank you so much for joining us today. Can you tell us a little bit more about your role at DXC?
Sue Ann: Sure. I am vice president of ESG for DXC Technology, so that includes our ESG strategy, overseeing ESG related disclosures and reporting and, of course, our carbon accounting.
Eliana: Fantastic. Well, I'd love to learn a little bit more about your journey within the sustainability space. I know that you have had several years working across business operations, supply chains, and quality control. And when you joined DXC, this was your first official ESG-focused role. Can you tell us a bit more about what that transition was like and what were some of the key learnings and takeaways that you took from this journey?
Sue Ann: I spent most of my career in continuous improvement and quality leadership roles, and those are really data intensive, and they also worked with every function across the business. So, when I took over the ESG role, there were tons of similarities between this role and what I had done previously. ESG is very data intensive and my role currently interfaces with functions all over the business. So, from my prior roles, I was really familiar with how those functions operated, and that helped dramatically as we think about ESG disclosures that engage different parts of the business. So, I felt like I already had my footing. The biggest challenge has been, and probably will continue to be, staying updated on all of the various regulatory changes. It's the biggest challenge because I’m constantly attending webinars, reviewing a lot of materials on regulatory changes, and there's just so much information, so much change across the 70 plus countries that DXC operates in that it's a lot to absorb and not a lot of time to prepare for.
Eliana: Yeah, absolutely. It can feel a bit daunting sometimes with the alphabet soup of everything that's happening in ESG and sustainability. So, I totally understand that. Do you have any advice for those people who are just getting started in this journey?
Sue Ann: I would say be a sponge. Learn as much as you can from a lot of the materials that are publicly available on the Internet. Organizations like CDP, the science-based targets organization, the Greenhouse Gas Protocol. They all have great resources on their websites. So, certainly take advantage of those. And then secondly, I'd say make sure you network with others that are in a similar position to yours to understand best practices, things that they've done to get started or improve their activities. And then finally, I'd say make sure you're building really strong internal relationships with your subject matter experts. When they understand what we're doing and why we're disclosing and reporting, then they can provide much better information to improve the content of ESG disclosures.
Eliana: Scope three makes up the majority of DXC’s carbon footprint in 2023. According to your report, it made up about 74% of your total footprint. I'd love to learn a little bit more about how you're tackling the challenges of measuring scope three, working with your suppliers, and setting attainable reduction targets. Can you tell us a little bit more through that?
Sue Ann: So let me set some context for our scope three. DXC is unique in that we're an IT services firm, so our scope one and scope two emissions are specific to our offices and our data center somewhat limited. We don't have any manufacturing activities, we don't have distribution infrastructure, so it stands to reason that our scope three would be the largest component of our carbon inventory. Within scope three, our purchased goods and services and capital goods make up over half of our total carbon emissions inventory. So, on the one hand, that's really nice because any changes that we can make to the way that we engage our suppliers, that can have a really big impact. But on the other hand, it's challenging because we have 350 to 400 suppliers that make up the top 80% of purchases by spend. So that's a lot of suppliers for us to engage with. And when we started our purchased goods and services and capital goods emission calculations, we used a spend-based methodology and still do today. That's pretty straightforward. A lot of companies use that, and it's relatively easy to calculate. But over the next two years, we'll be evaluating other methodologies so that we can improve the fidelity of those calculations. We've just started to gather data on the suppliers who have set or are committing to set science-based targets. And what we're seeing is that a pretty large percentage, about 45% of our suppliers by spend, are on some kind of a science-based targets journey. That's really encouraging to me that our engagement efforts and requests for suppliers to adopt science-based targets are going to be really well received.
Eliana: That's great to hear. It's great to hear how many of your suppliers seem to be really ahead of the game in that sense. It's fantastic. So DXC has committed to setting near-term company-wide emissions reductions in line with the Science Based Target Initiative, SBTi, and those targets have been recently formally approved. So congratulations on that. Can you walk us through how you went about setting those targets?
Sue Ann: Thank you, Eliana. We are really excited to have our science-based targets approved. That was a big milestone for us and really does signify for us the commitment that we're making to reduce our impact on the environment. Some of the keys to that whole process go back to DXC’s virtual first business model. So we adopted that model a couple of years ago, and it allows most of our employees to work from anywhere. It has allowed us to significantly reduce our physical office space, and it really forms the basis for our forward-looking emissions reduction forecast. And that, in turn, helps to define our target. So it was very clear-cut how we were going to set our targets. And we have a lot of tangible evidence for what that future-looking performance will look like. We have a schedule that defines when we plan to exit or reduce square footage of certain offices. And so that really helped to define what we were going to do going forward and that it also made putting together our science-based targets documentation so much easier, so much more clear-cut.
Eliana: Yeah, absolutely. And do you have any advice or learnings that you took from this entire process that you would share with others that are also looking to set up the same and get these targets approved?
Sue Ann: Yeah, our carbon emissions are so directly impacted from our sites, so we partner very closely with our real estate team, and not only do they help us develop the future emission forecasts, but they provide most of the data that we require for our scope one and scope two emissions calculations. And that partnership is so critical to the completeness and the accuracy of our emissions calculations. It's just probably why it is so important that we are working hand in hand with them day in and day out.
Eliana: So, with 2024 right around the corner, are there any key initiatives and projects that you'd like to highlight that you'll be focusing on next year?
Sue Ann: Well, in addition to our virtual first business model, we are also constantly improving the efficiency of our data centers. We partner with data center suppliers to make sure that we've got the best strategy in place for both our customers and for the site economics. We're also working to electrify our fleet vehicles, and each year we increase the electrification by 10 to 15%. And then finally, we're continuing to improve the fidelity of all of our source data through data cleansing initiatives and automation. I can see a point in the future, I don't know, maybe five years from now, where most, if not all, of our carbon emission calculations are automated, definitely for scope one and two and hopefully for most of our scope three calculations. And I think that's probably where we're most excited about our partnership with Persefoni. Year over year, we want to continue to simplify our calculations while improving the fidelity and granularity of our reporting.
Eliana: Well, Sue Ann, we really appreciate your partnership, and we really commend all the great work that you've been doing at DXC Technology, and we're super excited to see all of the achievements in 2024 and coming years. So, thank you once again for joining us in today's episode.
Sue Ann: Thank you so much for having me.