What makes a sustainability programme great? What are leading companies doing differently? How can procurement contribute to the sustainability strategy? I was recently invited on a panel discussing the essential success factors to meet sustainability targets in which the group discussed ideas that will take your sustainability programme to the next level.
1. Make supplier sustainability a central element of your sustainability strategy
The chances are your company has a sustainability strategy in place already. But does it consider your suppliers? A recent study found that on average 60% of a company’s sustainability footprint sits in the supply chain and suppliers typically contribute up to 65% of a company’s value-add. Procurement has a uniquely powerful lever at its disposal here – not pulling it makes a huge dent in your efforts. While this may be a no-brainer for you as procurement professionals, it doesn’t necessarily mean it’s on your C-suite’s agenda – so make sure it is.
2. Consider all your suppliers – risk is not limited to top-spend
When I say your strategy needs to consider your suppliers, I mean all of them. The typical approach of focusing on top-spend suppliers or a certain material group doesn’t work here. With sustainability, risk often lies in the lower tiers and the tail-end. Leaving this unmanaged means you might be doing business with suppliers that violate your sustainability principles and pose a threat to your efforts and not least, your reputation. Obviously, this approach requires transparency (technology is your friend here) but look at it like this: a truly sustainable supply chain is only as strong as its weakest link.
3. Don’t reinvent the wheel – use international standards
There are established leading standards that are readily available like those of the GRI, ISO, UN Global Compact, SAI, and so on, I advise you to use them instead of trying to set your own. Few such endeavours have ended in success, whereas the existing standards represent a reliable global best practice and provide strong guidance for companies.
4. Make a smart bet on tech – it won’t work without IT
Whether you are implementing a code of conduct, assessing your impact, auditing suppliers or working on collaborative improvement projects – if you want your efforts to really take off you’ll need to step up your digital game. Research has found that any such measures are 20% more effective on average with the use of technology than without. There are numerous solutions on the market today that save us time and resources that can then be invested in truly value-adding activities.
5. Don’t try to achieve everything at once, but report on your achievements
Don’t shy away from ambitious targets – we need them if we want to meet our climate goals – but don’t expect to achieve everything overnight. Instead, work out near- to mid-term milestones that contribute to your long-term objectives. It is important to keep moving and above all, to document your efforts and progress. Lots of companies today are required to publish a sustainability report anyway, but I suggest reporting regardless of your company size to benchmark and assess your sustainability performance on a regular basis, understand risk and demonstrate value to external stakeholders.
Nick Heine is cofounder and head of sustainability and compliance at IntegrityNext.
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