P2.3 Engaging Suppliers
A New Tool for Strengthening Supplier Reporting and Engagement
Building resilient supply chains is essential in an era when increasing extreme weather events around the world are frequently disrupting commerce, and human rights concerns can damage even the glossiest reputation. With the regulatory, reputational, legal and operational risks associated with sustainability issues rising, companies must understand how every one of their suppliers is performing on key environmental, social and governance (ESG) metrics. In short, companies are expected to “own” and disclose the performance of their suppliers whether it relates to the human rights of their workforces or greenhouse gas emissions from their operations.
To catalyze better supply chain practices, Ceres launched a new tool for companies, the Supplier Self-Assessment Questionnaire (SAQ): Building the Foundation for Sustainable Supply Chains.
For many companies, the biggest sustainability risks they face are embedded in the supply chain. While some companies and industry sectors have developed fairly sophisticated methods for assessing and improving the sustainability performance of their suppliers, Ceres’ year-long survey of best practices in this arena revealed that most focus on either environmental or social impacts. Effective supply chain management requires attention to both, including issues such as climate change, water scarcity, human rights, governance and stakeholder engagement.
The SAQ allows companies a point of engagement with suppliers and a way to establish expectations, while supporting suppliers' integration of sustainability into their business strategies and management systems. It is useful for all companies seeking to strengthen supplier engagement, but provides particular guidance welcomed by those just beginning to address sustainability issues in their supply chains. Drawing on leading practices in the field, and addressing environmental, social, and governance issues, the SAQ is a “conversation starter” for companies to use with their suppliers as they begin to assess and address the sustainability risks and opportunities in their supply chains.
Companies are leveraging the SAQ in a variety of creative ways. Many are using the full SAQ with suppliers as a way to define expectations and establish a performance baseline, while other companies and even industry groups are using the SAQ to conduct a gap analysis and identify opportunities to strengthen existing tools and frameworks. Ceres encourages companies, industry groups, suppliers, and all interested stakeholders to adapt the SAQ to meet specific needs, realizing the more broadly the tool is used, the more successfully we scale change.
Ceres' SAQ is part of a broader strategy to raise the bar of supply chain sustainability performance across the global economy. Traditionally, supply chain management has focused on whether a particular supplier facility is complying with certain minimum standards or codes of conduct related to treatment of workers or environmental impacts. We are now seeing a paradigm shift from supply chain management to supply chain improvement. For any company that expects to thrive in the 21st century global economy, higher standards for supplier social and environmental performance, and robust measurement and transparency of that performance, is essential. The SAQ will help companies get started on this journey.
For more examples on sustainable supply chains, click here.