“You can’t be sustainable without your suppliers” — 8 things we’ve learned about supplier sustainability from industry giants
- Environmental, Social, and Corporate Governance (ESG)
- Supplier Management
Every 5 weeks represents ~1% of the decade gone, and by the end of June, we’ll be a startling 25% of the way through the 2020s. When you put that in the context of the 2030 sustainability targets set by enterprise organizations and governments after COP26, the clock is seriously ticking – and many sustainability and procurement leaders still aren’t sure where to start.
That’s why we created Vizibl’s ‘Decade of our Lives’ series. Our mission: to share, teach and inspire us all to act. Over the last 6 months, every 5 weeks, we’ve brought together thought leaders and industry experts to share actionable strategies and insights to address the climate, carbon and collaboration challenge.
Here, we bring together our top eight takeaways from Vizibl’s Decade of our Lives series so far.
The next session, purpose-led partnerships with Unilever’s head of partnerships and social procurement Alex Tarmo, is on Wednesday 29th June. We’d love to see you there.
1. “You can start without the data” – Anke Hampel, Global Innovation & Sustainability Director, Tetra Pak.
The most prominent issues CPOs face in the early stages of supplier sustainability management are all related to data. It’s very easy to get stuck straight away when you don’t feel the quality, format and availability of data matches your long-term ambitions. As a result, even short-term projects never get off the ground because you get lost on the endless hunt for perfect baseline data.
Anke Hampel suggests a different approach.
“A lot of (baselining) work, in many organizations, is done using literature-based data,” said Hampel. “This is an industry average, which I use because – in the absence of other data – I have to start somewhere.
“So, while aligning what suppliers’ emissions look like and what they are reporting is key to get started, you can get started without this.
“(A more important thing) to do is set a target. Then you can dive into the numbers.”
2.“You need to be working with your suppliers in an active, collaborative manner” – Peter Smith, Managing Director, Procurement Excellence.
A recurring theme has been the need for proactivity and the requirement for a consistently collaborative approach between buyer and supplier.
“I do think that climate change is the most important issue facing humanity today,” said Peter Smith. “But I do have a few concerns over how the discussion is going around scope 3. I think some people see scope 3 emissions being something that is a bit passive. We’re getting a lot of people talking about this now, but there’s still less action than talk.
“You need to be working with your suppliers in a collaborative manner. If you’re a smaller company and you don’t have the power to influence or direct your suppliers, you need to think about what those numbers mean and whether you can change what you’re buying, change the specification, change the supplier even. I don’t want scope 3 to be a passive data collection point.”
3. “Make the bigger picture clear to everyone in the organization” – Jacklin Wienczierz, Head of Supplier Sustainability and Climate Initiatives, Clariant International.
It’s obviously essential to get buy-in to any sustainability strategy – but what’s equally important is painting a clear picture of why a coherent approach to the issue is essential in the first place. It’s a point that Jacklin Wienczierz was keen to emphasize in her session, hosted by Caitlyn Lewis, Founder & MD of Supplier Day.
“Making clear that there’s a common understanding of the goal and linking it to the bigger picture [is so important],” she said. “Make that bigger picture clear to everyone in the organization. It’s very important to make sure you get the buy-in from stakeholders and management level and the workforce, but it’s really important that everybody understands the goal and defines their contribution to it.”
How that picture is painted shouldn’t be limited to one group, either. A key communication skill is telling the same story in a different language to as many groups as possible. Some people respond to lengthy reports, others to more visual prompts. There’s no one-size-fits-all approach. Making your communication channels as broad as possible is absolutely essential to achieving that.
4. “We need leaders that are prepared to say ‘we don’t know if there is a problem, but we’re committed to looking for it’” – Thomas Udesen, Chief Procurement Officer, Bayer.
We all want perfection, or something approximating it, but Thomas Udesen argued that this can be damaging and might even serve to stifle innovation.
“In many organizations people are afraid to take steps in case somebody accuses them of some degree of imperfection,” Udesen says. “Everybody knows the world is not perfect.”
He’s not wrong. Udesen points to the example of as many as 160m children globally working in some kind of forced labor. You couldn’t find a starker illustration of just how far short of perfection we’re falling. Facing that issue head-on, though, shouldn’t be something that business leaders are afraid to do.
“We need to create an environment where leaders are able to show courage and also vulnerability,” he says. “We need leaders that are prepared to say ‘we don’t know if there is a problem, but we’re committed to looking for it.”
5. “The greatest threat to our planet is the belief that someone else will save it” – British explorer Robert Swann, via Cesare Guarini, Director of Sustainability Procurement, Philip Morris International.
Cesare Guarini emphasized the importance of collaboration during his Decade of our Lives event. Using a powerful quote from British explorer Robert Swann – the first person to walk to both the North and South Poles – he reminded us that “the greatest threat to our planet is the belief that someone else will save it.” This statement, he argued, illustrates that this isn’t a crisis that can be solved by individuals working alone; we are all accountable, and this, at its basis, is a collective issue.
Regeneration, collective responsibility, collaboration, and cautious positivity were four key takeaways from an event which not only illustrated the collective desire for action in procurement, supply chain and sustainability functions, but also reminded everyone collectively that the future starts now.
6. “To tackle scope 3 you need more time, as (it) involves doing big things together with stakeholders and suppliers” – Arjen van der Woude, Global Director Strategic Sourcing Supply Chain, Heineken.
The key message of the Heineken Decade of our Lives session was that collaboration is key and that a silo mentality will harm progress. This is why the company’s relationship with Vizibl is helping them take sizable steps to fulfilling their objectives in the short, medium, and long term.
“Our 2040 [net-zero] commitment is very bold and it brings a sense of urgency to our internal organization as well,” said van der Woude. “It’s not easy to get there, it seems like it’s far away because to tackle scope 3 you need more time as it’s more complex and involves doing big things together with stakeholders and suppliers.
“Our 2030 and 2040 commitments were really co-created with stakeholders, including employees, but these are also commitments where you don’t have to have all the solutions in front of you. If you ask me today, do we have all the solutions and all the roadmaps in place in order to secure it today, through planning? The answer is not necessarily.”
7. “We didn’t necessarily know what needed to be done – we just knew that we needed to get there” – Emir Sassi, Global Head of Procurement Sustainability, Novartis.
Novartis is a company that has committed to carbon neutrality by 2030, and during the session Emir Sassi admitted, to some extent, that this very public commitment represents a giant step into the unknown, saying: “We didn’t necessarily know what needed to be done – we just knew that we needed to get there.”
It’s that kind of bold, can-do attitude which now typifies the approach companies are taking to the environment, and it’s refreshing and impressive in equal measure. Novartis has spent 2021 segmenting its supply base and identifying which suppliers are necessary to work with in order to achieve its sustainability ambitions, a clear demonstration that alignment and collaboration within supply chains is at the core of this fight.
8. “What can companies be doing now? Set targets based on things you can control.” – Peter Smith, Managing Director, Procurement Excellence.
Here at Vizibl we place particular emphasis on the importance of robust Supplier Collaboration, starting with an initial small set of strategic suppliers, in enabling procurement to achieve ever more ambitious targets – most recently in the sustainability space.
“A key leading metric we look at is active collaborative relationships (ACRs),” said Vizibl CMO Sarah Clarke. “ACRs are defined by a set of behaviors – does the relationship have activities, a good cadence around mutual projects, innovation initiatives and opportunities that are all logged against an objective or a strategic initiative, that are aligned to a joint shared vision, and are mutually beneficial to both the buy side and the supply side?
“So, if for instance, your business objective is to reduce scope 3 supply chain emissions by 50% by 2030, the key leading metric from a Supplier Collaboration lens is what is the total number of active, collaborative relationships you have working towards this goal. If the answer is only a small handful, ask yourself if you’re really on the right path to achieve this.”
Smith concurs. “Measuring things like engagement with suppliers is a good place to start,” he says. “I think targets based very much on what you can control yourself are things that companies can be doing now.”
The next session in Vizibl’s Decades of our Lives series is purpose-led partnerships with Unilever’s head of partnerships and social procurement Alex Tarmo, is on Wednesday 29th June. We’d love to see you there.
SOURCING SXM SRM03/22/2019
- Environmental, Social, and Corporate Governance (ESG)
- Supplier Management
SOURCING SXM SRM03/22/2019