Today, there is no shortage of pledges and public commitments from organisations striving to reach their 2030 vision and sustainability promises. There is an underlying urgency for companies to take meaningful actions towards Environmental Social and Governance (ESG) initiatives. The pressure to meet these pledges from stakeholders, especially customers and investors, is increasing. However, the strategy around where to start and how to use these initiatives to make a true impact is often still not front-of-mind for leadership teams.
How do organisations take immediate steps to progress their supply chain and sustainability initiatives to meet these pledges? There are four aspects business leaders should consider.
Integrating sustainability into business strategies
There is no single path to adopting sustainability-driven initiatives. However, key steps exist to integrate sustainability into a business strategy successfully.
The first step is the education of the leadership team and workforce. All stakeholders of the organisation need to understand how incorporating sustainability into their practices can provide multiple benefits in the long term.
Secondly, it is important to define what sustainability means for every area of the company. Then identify these benefits. Organisations must identify the benefits, issues and risks that have the biggest impact and are most relevant to the business and its stakeholders. Using this information, they should better understand where they should concentrate their efforts.
Likewise, they need to set sustainability goals within their business strategy. Ones they can work towards and benchmark against. Once these goals are established, they need to implement specific systems and processes to help drive these initiatives.
Supplier collaboration tools are crucial in tracking progress against these objectives. Defining key performance indicators to meet the identified goals will allow the business to detect areas for improvement.
Incentivise the right behaviour
Once a sustainability framework has been fully integrated into the organisation’s business strategy, these policies must be cascaded into conversations with the supplier ecosystem to collaborate and work towards reaching their pledges. After implementing change within their own four walls and across their supply chain, organisations can also start sharing the information with business partners and customers. A business’s sustainability practices and policies are only as strong as those successfully implemented across the entire supply chain. Performance in this area is increasingly in the public’s consciousness. This is where ESG ratings tools can be utilised for investors to measure corporate social responsibility and sustainability and make meaningful comparisons between organisations.
Additionally, leadership teams must continually incentivise the right behaviours with governance models throughout the organisation and with suppliers.
Incentivising suppliers is achievable by showing them the positive impact they are making. Holding supplier awards, for example, can encourage them to partake in more sustainable practices for reputational benefit. This will enable organisations to collaborate with incentivised suppliers towards their sustainability initiatives. Suppliers who don’t deliver sustainable practices will ultimately lose business to their competitors who do.
Digitisation in sustainability
Organisations need to ensure that their sustainability targets are measurable, viable and impactful. One way the supply chain landscape is evolving to create this change is through the digitisation of sustainability. For example, organisations can use digital tools to map their environmental footprint and assess the impact of environmental shifts on their business. This creates a conduit for organisations to measure actions, outcomes and results towards their pledges.
Utilising data in this way allows organisations to show clear, measurable progress on how they are reaching their targets. This highlights progression for customers and stakeholders, investors, shareholders, and trading partners. It also enables them to engage with suppliers, using actionable intelligence to help them meet sustainability goals.
Looking forward, organisations need to be proactive when looking to achieve their ESG and sustainability commitments – there is no time like the present. To reach these pledges, organisations need to digitally transform, ensure they are integrating sustainability into their business strategy, apply leading sustainability practices, and incentivise sustainable practices with their suppliers.
Although implementing sustainability practices within an organisation can seem like a considerable cost upfront. However, companies will see a significant return on investment in future years. This will subsequently enable organisations to become innovators within their industry. They will build a competitive advantage and brand trust with customers whilst also making a measurable impact towards environmental change. Conversely, organisations that don’t make this change will see detrimental effects to their reputation and bottom line, leading to a loss of trust in the brand.
How to apply leading practices into your sustainability programs
Finally, there is no denying that applying leading practices to an organisation’s sustainability programs can prove challenging. To help, we have outlined below a quick checklist of actions to create and manage sustainable businesses and supply chains successfully:
- Establish a strong vision: Create a strong sustainability and procurement vision aligned with the organisation’s overall business strategy.
- Set out sustainability targets: Determine clear targets and expectations for the organisation. Communicate these effectively to all employees, so everyone can embrace the sustainability vision and work towards reaching designated goals.
- Integration with procurement: Sustainability needs to be integrated across all procurement functions.
- Report your progress: Organisations need to report all sustainability progress to their customers, stakeholders, investors etc., to show they are working towards their target milestones.
- Engage your business partners: Organisations need to align with their suppliers, distributors and other members in their value chain, ensuring they are undertaking sustainable practices. Effective collaboration is the key to accelerating sustainability across an organisation’s industry or value chain.
- Digitise your processes: Where possible, look to see how you can digitise sustainability to map and continuously track progress.
Vizibl is a leading SaaS supplier collaboration tech platform that enables enterprise buyer organisations, at scale, to manage better supplier partnerships, accelerate innovation and drive growth.
Vizibl has been named as one of the 5 technology companies changing the way organisations do business in the “IDC Innovators Report 2020”, has been nominated by Procurement Leaders in their ‘Technology of the Year 2020’ category and is ranked by Spend Matters in their “Top 50 Tech Companies To Watch” list. With a co-founding team led by Mark Perera (founding CEO of Procurement Leaders) and Alex Short, Vizibl is transforming how companies tap into the power of their suppliers.
