When it comes to sustainable procurement trends in 2016, collaboration between industry peers and even competitors will become more common to determine best practices and achieve positive results.
Pierre-Francois Thaler, co-CEO of EcoVadis, said while this collaboration and the industry specific initiatives born from it is not exactly a new concept, it will become more widespread. He expects more companies will engage with one another this year to develop a shared approach to sustainable procurement.
“Companies are saying, ‘OK, we need to do it, but if we want to drive systemic change and if we want to have a real impact on driving better political and social conditions for the world and the supply chains, we need to collaborate with our competitors,’” Thaler told Spend Matters.
Thaler pointed to the EICC initiative as an example of industry collaboration on sustainability practices. Founded in 2004 the Electronic Industry Citizenship Coalition (EICC) is a group of electronic companies that abides by a common code of conduct to support “continuous improvement in the social, environmental and ethical responsibility of their supply chains.”
Even major corporations are realizing they may not have the leverage to encourage their entire supply chain to change practices, making them more sustainable or ethical, Thaler said, which is why more companies are joining forces on these type of industry specific initiatives. In 2016, specifically, he expects this type of collaboration to grow across more sectors.
“What is changing now is it is extending to almost all sectors,” Thaler said.
Companies Supporting Collaboration
Luis Neves, chairman of the Global e-Sustainability Initiative (GeSI), a collaborative sustainability initiative created in 2001 for the information and communication technology sector, agrees companies need to work together to make positive changes.
“The types of challenges we are facing cannot be resolved by a single company,” said Neves, who is also group sustainability and climate protection officer at Deutsche Telekom, based in Germany. Initiatives like GeSI enable companies within an industry to exchange sustainability best practices, he said.
The GeSI has developed a guide companies in the industry can adopt to implement sustainable practices. They can use the guide to do a sort of self assessment, Neves said, and engage suppliers to determine how sustainable their supply chain is and identify areas of risks.
Collaboration as a Competitive Advantage
Members of the GeSI initiative include network operators, service providers, manufacturers and trade associations. When the initiative first started, companies were mainly motivated by external pressures to adopt more sustainable operations. Neves pointed to problems popping up in companies’ supply chains like child labor that were tarnishing brand reputations as one reason why companies began turning toward sustainability to make changes. However, as time has gone on, he said, companies are realizing collaboration on sustainability efforts with industry peers has its business benefits.
“Therefore, companies began looking at it from competitive advantage standpoint as well,” he said.
Innovation Brings Different Industries Together on Sustainability Efforts
Ford recently joined the Electronic Industry Citizenship Coalition, a group of electronic companies working together to improve the social, environmental and ethical conditions in their supply chains, with a specific focus on worker wellbeing. Ford is reportedly the first automaker to join the electronics coalition. However, Hau Thai-Tang, group vice president of global purchasing for Ford, said as Ford continues to invest in developing electronic and autonomous vehicles, joining the electronics coalition made sense and will improve collaboration with its suppliers.
Rob Lederer, executive director for the Electronic Industry Citizenship Coalition, also said the move represented a new level of collaboration between two different industries.
“Ford is our first automotive company member, and we are looking forward to collaborating and building on its unique global experiences and supplier relationships, as well as the growing convergence between the automotive and electronics industries,” Lederer said.