Performance: Supply Chain
VISION: COMPANIES WILL REQUIRE THEIR SUPPLIERS TO MEET THE SAME ENVIRONMENTAL AND SOCIAL STANDARDS AS THE COMPANY HAS ESTABLISHED FOR ITSELF. COMPANIES WILL ESTABLISH SUSTAINABLE PROCUREMENT CRITERIA, CATALYZE IMPROVED SUPPLIER PERFORMANCE, AND FACILITATE DISCLOSURE OF SUPPLIERS’ SUSTAINABILITY INFORMATION.
For many companies, the largest opportunity for improving sustainability performance is in their supply chains. By managing supplier engagement in a way that achieves the highest social and environmental standards, a company can achieve performance goals while creating a ripple effect that raises standards deep within the supply chain.
Sustainable supply chain performance begins with establishing supplier policies and endorsing industry codes or practices containing explicit references to social and environmental standards. These policies, codes and standards can only be realized when they are integrated into the RFP processes, vendor selection criteria, procurement practices, and ongoing supplier engagement. Through these processes, companies and suppliers define and commit to mutual performance goals.
Bringing sustainability improvements to life across the supply chain requires a commitment to long-term supplier relationships accompanied by appropriate levels of engagement and training. Many opportunities for lasting performance improvement can be supported through collaborative initiatives that identify root causes, reinforce best practices, and build capacity. It is rare that social and environmental issues exist in isolation. There is typically an interconnection between environmental issues, social inequalities, working conditions, human rights and safety. A collaborative approach is necessary to effectively address – and to distribute the associated cost of – these systemic challenges.
The potential benefits of improved supply chain performance are every bit as compelling as those achieved through direct action on the company’s own operations.