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P2.4: Measurement and Disclosure

CERES ROADMAP EXPECTATION

Companies will disclose a list of their Tier 1 and 2 suppliers and measure and disclose suppliers’ sustainability performance.

The only way a company can ensure its efforts to encourage sustainability performance by its suppliers are effective is to establish systems for monitoring, auditing and disclosing supplier environmental and social performance data. Armed with this information, companies can determine what’s working well and what isn’t and adjust their engagement strategies accordingly. It also allows companies to identify where the highest sustainability risks in the supply chain exist and to direct more resources to address those risks.

The most forward-thinking companies in this regard understand there are enormous benefits to looking beyond metrics focused on compliance with supplier codes of conduct; they understand that improvement of supplier social and environmental performance can also strengthen the bottom line.

For this expectation supply chain monitoring systems were evaluated, as well as company efforts to measure and respond to supplier performance on key environmental and social factors.

Key Findings

  • Thirty four percent (210 companies) monitor supplier sustainability performance, up from the 25 percent in 2012.
  • Eighteen percent (110 companies) perform in Tiers 1 and 2 for demonstrating that they have implemented a robust supply chain monitoring system to measure and respond to supplier performance on key environmental and social factors. For example, IBM discloses the results of its annual audits by geography and by key issue area, such as working hours, child labor and freedom of association. The company also discloses those suppliers with whom IBM conducted a re-audit to assess if issues of noncompliance were remedied and the Supplier Improvement Plan implemented, as well as the results of those re-audits.

 

Interactive Data

Click on a performance tier below to view more information about how companies are performing.

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[23] Companies in Mediocre in 2014