How to manage your suppliers on sustainability?

Why is it that many organizations have their sustainability strategy and priorities clear, but don’t seem to be able to manage the sustainability of their supplier base? Luckily, there are many useful tools available. But how to choose the right method? We help you see the wood for the trees!

Nowadays, more and more organizations are incorporating sustainability into their strategy. In this process, the role of procurement is of vital importance as for instance, 90% of companies’ impacts on the environment occurs in the supply chains. To truly improve the sustainability of your procurement and make your actions measurable, the management of your suppliers is crucial. We believe that the time has passed when it was enough to simply ask a supplier to sign a Code of Conduct or to conduct audits. In this blog, we will give concrete guidelines to tackle this challenge.

Select sustainable products and services
When you are selecting a new supplier it starts with asking yourself the question: how can I organize this need with the lowest negative and biggest positive impact? The good old Kraljic matrix can be a big help to choose your approach. For non-critical suppliers (such as cleaning products and office stationery) moving to more sustainable sourcing options is the easiest, as there are many suppliers available offering similar products. This gives you the opportunity to pick and choose the most sustainable product and supplier and demand applicable standards.

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Partner with strategic suppliers 
Questioning suppliers that are critical for your business process on sustainability can be more difficult. However, when the focus is on collaboration, this even provides a chance to strengthen the relationship. We see gaps between organizations getting smaller and more and more strategic partnerships in supply chains arise. It’s far more effective (and rewarding!) to act together based on trust, then to try to control by audits and corrective action plans.

Use a tool for supplier management
Apart from the approach you choose for each supplier, monitoring and evaluation of the sustainability of your suppliers is crucial. Asking criteria in contracts, without monitoring if the suppliers are obliging to them, probably does not have the effect you hope to establish. However, when your supplier base is large, this can be quite a task. Luckily, there are many tools to support with this supplier sustainability assessments. The latest index of our partner EcoVadis shows that their participants show an increase in their sustainability score over the years. Though the overall score on sustainability in the supply chain remains striking low, so work needs to be done!

But how to choose which?
Existing supplier sustainability assessment vary in scope, focus and functionalities. You might choose the tool you get asked most by your clients or that is used most in your sector. But if you want to make an informed decision, you need insight in your options and choices. To help you with this decision, we have drafted an easy to use decision tree. The perfect partner for you will for instance depend on whether you focus on traceability or policy, if you want to be able to ask your own questions or want to perform audits on the provided information. Below you can see a small version, the decision tree can be downloaded here.

If you are looking to talk further on how to manage your suppliers, don’t hesitate to get in touch with our sustainable procurement expert Susan!

Author: Susan van Kruijsbergen.

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