Measuring the impacts of a sustainable supply chain
ESG strategy and transformation
Measuring the impacts of a sustainable supply chain
Fri 07 Jul 2023
As organisations achieve a level of maturity in dealing with sustainability requirements, companies are moving from wanting to do business more responsibly to wanting to measure what impact doing business more responsibly is having. We know that data is key to an organisations ability to measure such impacts but, when it comes to the supply chain, knowing what data to collect and how is essential.
In terms of data collection, building a more collaborative relationship with suppliers helps gain a better understanding of supplier sustainability maturity levels and needs. What that data looks like will depend on the type of business and sector you are in. For example, it could be information on purchase orders and certifications relating to organic produce or chemicals present in products. Moving on a step further, collecting data for a product lifecycle assessment will involve more detailed sustainability data to better measure policies in place.
Supply chain size is a further consideration. When dealing with hundreds of suppliers, traditional methods of manual data gathering using existing technology can be slow and involve a higher degree of inaccuracy. Increasingly, exploiting the full potential of new technologies that help automate data collection can help organisations understand suppliers in a more scalable fashion.
Use data to understand and evidence
Then is also the verification process of sustainability ethics to consider. This involves collecting data to understand and evidence a supplier’s values to assess whether their sustainability credentials are authentic and, second, whether they align with your values. It’s more about moving away from taking sustainability credentials at face value but using data to conduct a deep dive into how those credentials work in practice.
From a regulatory perspective, third-party data assurance is also increasingly relevant and needs to be fed into the process. So looking at which regulations you’re working towards and how they are relevant to your business is a vital part of the data collection process.
Chart the downsides
We know that the complexities of the supply chain add additional challenges to achieving sustainability commitments and targets. Data not only helps map commitments and targets but also acknowledges the bumps encountered along the way. From a product perspective, for example, it’s no longer okay to claim a product uses recycled plastic without charting any downsides that might occur elsewhere in the value chain. A recent update to the UK’s Green Claims Code means organisations can no longer cherry-pick data and omit anything still material to a product’s overall sustainability.
Build strong foundations
A good starting point for data gathering is to apply the UN guiding principles on business and human rights across your organisation, including the supply chain. This can help inform the type of data that shines a light on issues such as modern slavery often hidden in the wider supply chain. Building strong foundations allows organisations to track and respond to issues more effectively. It can also help guard against financial loss when developing new projects. For example, lack of attention on considering the social and environmental impacts on local communities can abruptly halt projects, putting pressure on budgets. Data showing the impacts and evidence of mitigation plans are increasingly essential.
Above all, be transparent
Today’s consumers are looking for authenticity in the organisations they deal with. If organisations are open and honest in communicating exactly where they are on their sustainability journey, where there are gaps and what measures they plan to put in place to address those gaps, stakeholders will see a trustworthy and reliable partner. Clear communication on prioritising sustainability policies that are material to your business can not only improve the quality of data collected but also qualify the levels of resources and investment required.
This blog is based on a webinar produced by Mazars entitled Committing to a Sustainable Supply Chain. Speakers included Alice Strevens, Associate Director, Human Rights and Social Impact, Mazars, James Omisakin, Co-Founder of Compare Ethics and moderated by Chris Fuggle, Global Head of Sustainability, Mazars
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Alice Strevens Associate Director Human Rights and Social Impact - UK
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