Sustainability and transparency are different things, but they go hand in hand, says Jamie Barsimantov, chief strategy officer at SupplyShift. Transparency is knowing your supply chain and your suppliers, whereas sustainability is knowing how they’re doing in terms of environmental, social and governance (ESG) measures.
Transparency starts with getting to know your suppliers, while understanding what’s important to your company, and doing the hard work of asking your suppliers the right questions, then tracking how they’re doing. It’s also about making hard choices when suppliers aren’t living up to the standards you’ve set for them. While forced labor and conflict minerals might constitute a hardline dealbreaker, there are softer limits for most companies when it comes to things such as greenhouse gas emissions. Businesses should take the opportunity to help suppliers on their journey, and educate them about the impact their production practices have. That includes incentives that could include facilitating favorable “green” loans.
The average consumer is becoming more educated and more demanding about sustainability in the companies they buy from or do business with. But even more compelling in the last few years than consumer pressure, Barsimantov says, is investor pressure, which is driving companies to disclose and to act.
Among the many challenges and opportunities facing businesses who want to adopt greater sustainability, perhaps the best place to start is for a company to set its goals about what it wants to achieve and why. It’s particularly important to ensure there are processes in place, and buy-in company wide in order to give these a chance of working out, as well as the finance to make sure you’re walking the talk. Metrics are particularly critical in showing you’re doing more than “greenwashing.” Service providers can help standardize the gathering of supplier sustainability metrics so you’re not constantly requesting and collating the same data from multiple suppliers.
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