The UN Global Compact revealed that supply chain practices are cited as the biggest challenge amongst its participants when it comes to improving sustainability performance. This can be largely attributed to the complex nature of modern supplier networks, coupled with the ambiguity surrounding the term ‘sustainability’. Whilst the UN sets out 17 clear sustainability goals, businesses can often struggle to apply these to their supply chain, whilst other businesses may associate sustainability with environmental impact only and neglect to consider other elements such as social and economic impact.
To truly drive sustainability performance across your supply chain, you must look beyond your own business impact and look toward supplier impact. However, many food businesses still struggle to engage suppliers beyond tier 1, with limited influence or visibility over their operations – This presents a significant challenge in driving supply chain sustainability, so how can we overcome this?
Driving Sustainability Performance Across Your Supply Chain
As the saying goes ,‘You have to lead by example’ and when it comes to supply chain sustainability, it’s never been more true. You can’t expect suppliers to meet a long list of sustainability criteria if your business is not operating in a sustainable manner itself. A strong internal sustainability culture, with clear goals and performance metrics in place will go a long way, and provides a solid foundation to build your supplier sustainability strategy upon.
As sustainability is such a broad area, it’s important to prioritise which elements you want to focus your efforts on, or you risk spreading your resources too thin. Remember, sustainability impact carries more weight than sustainability policy, so you want to ensure areas you do focus on deliver positive change.
Supplier communication is vital for a successful supply chain sustainability strategy. You must actively drive awareness of your sustainability policies, performance expectations and reporting requirements among your supply base. This will ensure suppliers are aware of what is required of them from the outset.
It’s also important to build relationships with suppliers beyond tier 1 and create a clear channel of direct communication with your lower tier suppliers. Businesses that rely on tier 1 suppliers to manage the sustainability compliance of lower tiers lack the resilience required to respond to slipping standards in a timely manner. By creating a direct line of communication, businesses will have increased visibility over any improvement or decline in sustainability performance across their entire supply network. Supply chain management solutions such as Foods Connected provide a mechanism for end-to-end supply chain mapping. You can store and manage supplier data across all tiers of your supply and directly request and receive information from within one central platform.
Aside from supply chain visibility, the most difficult aspect of supply chain sustainability is the suppliers willingness to engage. While many sustainability requirements may be mandatory for compliance purposes, others may be set as goals for supplier ranking purposes. In either case, an unengaged supplier can make the process of measuring sustainability performance very strenuous. A lot of the time, lack of engagement can be attributed to lack of understanding. If your supplier is unclear on how to accurately measure impact or demonstrate sustainability results, they can become unengaged with the process, providing incomplete or incorrect data – In some instances this may go unnoticed for long periods of time. Therefore, it is critical that businesses collaborate with suppliers at all levels of the supply chain, and provide support where needed to understand and implement sustainability initiatives and develop reporting methodologies that deliver positive impact. By working together with your supplier to improve their business sustainability, your will benefit from a more transparent and trusting relationship.
It is no longer enough to create sustainability policies without the commitment to action them and hold your supply chain partners accountable for non-compliances or poor performance. It’s important that your business has a robust data capture and monitoring process in place to both protect data integrity and reduce the administrative burden of managing a plethora of supplier sustainability data. Foods Connected simplifies end-to-end data capture, monitoring and review through a single centralised software solution. You can create and share standardised data capture templates for each area of sustainability with suppliers, set up review frequencies, create sustainability rankings and more.
It is important to demonstrate sustainability impact internally to your business stakeholders, highlighting achievements and areas for improvement within your supply chain. This transparent approach will strengthen your internal sustainability culture and help inform future supply chain sustainability requirements or identify problem suppliers that are holding your business’ sustainability performance back.
When it comes to driving sustainability performance across your supply network, relationship building is key. In order for lower tier suppliers to positively engage with your business they must feel supported. Therefore businesses must actively engage with their supply base to demonstrate overall supplier sustainability impact and the suppliers individual rankings in relation to this. By opening this line of communication with suppliers, you are providing a unique opportunity to benchmark their sustainability performance against competing suppliers and identify their strengths and weaknesses, which in turn creates a willingness to improve. This provides a great opportunity for you to partner with lower performing suppliers and develop a feasible sustainability improvement plan, which will ultimately benefit your business.
For information on current food industry Sustainability and ESG Trends, download your free ESG report here: https://marketing.foodsconnected.com/esg-report-trends2022