How to Inform Supply Chain Engagement Strategy with the Latest Data

With nearly 500 eco-labels in 200 countries and across 25 industry sectors, it is easy for both consumers and producers to get confused. A Thursday morning panel at SB ’15 San Diego featuring Sheila Bonini, CEO of The Sustainability Consortium (TSC), and Adam Gordon, Supply Chain Account Manager at CDP, shared two innovative ways of addressing that challenge.

The Sustainability Consortium seeks to leverage and integrate existing metrics in order to make it more efficient and clear for companies to measure their sustainability impact. To do so, it works at the product category level and develops metrics for the biggest sustainability issues along the product lifecycle (‘hot spots’). Instead of reinventing the metrics, the Consortium partners with organizations that have already developed metrics in particular sectors

Several thousand companies have already joined these organizations, and yet the largest area of growth is in the supply chain. The impact can be significant: “In manufacturing, suppliers generate 40-60 percent of the carbon footprint,” Gordon said, quoting a report by McKinsey & Co. To get suppliers engaged, TSC starts with retailers, who then drive the conversation with suppliers. “Once I know how to work with one supplier, I also know how to work with another supplier,” Bonini explained. CDP makes it easier for suppliers to report by aggregating disclosure requests from multiple companies into one collective ask and by using the same reporting questionnaire across industries.

“We have found that if a supplier gets requests from two companies, the probability that that supplier will disclose information goes from 50 percent to 70 percent, and when three or more companies make that request, the probability is above 90 percent,” Gordon added. At CDP, over 7,000 suppliers in 80 countries have been asked to report in the past year. Both Bonini and Gordon recognized that due to limited visibility across multiple-tier supply chains, verification may become a challenge, but noted that up to now there have not been signs of suppliers submitting inaccurate information.


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