How to Select a Supplier Climate Data Collection Solution?
In today’s dynamic business landscape, companies are increasingly focused on sustainability, and the need for supplier engagement has never been greater. To track progress toward supplier engagement targets, businesses must implement effective supplier climate solutions. These solutions play a vital role in building robust supplier engagement programs, providing critical data for target tracking, and enhancing visibility into supplier GHG program maturity. Moreover, they facilitate the collection of primary emissions data, which can refine a company’s GHG emissions calculations and reduction tracking in the future.
The Growing Significance of Sustainable Procurement
Sustainable procurement is a topic gaining momentum, as evidenced by the 2022 Gartner/SPP Sustainable Procurement Pulse Survey, where 83% of respondents acknowledged the increasing importance of sustainable procurement over the past two years. Sustainable procurement applications empower organizations to assess supplier performance across various ESG issues within a unified platform. These applications offer essential capabilities, including:
- Data Collection: These solutions enable organizations to request sustainability information from all their suppliers, both public and private, through self-assessment surveys. Suppliers can submit necessary documentation, streamlining the process.
- Data Analysis: Sustainable procurement applications allow organizations to analyze supplier data based on multiple criteria, helping identify areas for improvement. They also present an overall “supplier score” for informed decision-making.
- Domain Expertise: These applications offer domain expertise and standard questionnaires to gather supplier information, especially for those just starting with sustainable procurement. Some even provide materiality guidance to focus on the most relevant issues.
Market Trends and Adoption
Supplier climate solutions are relatively new but gaining traction rapidly. In the 2022 Sustainable Procurement Pulse Survey, 54% of respondents reported using applications for ESG data collection, with an additional 45% planning to adopt such applications by 2024. The surge in sustainability-related legislation drives interest in these tools, as they are essential for supply chain due diligence and transparency.
Selecting the Right Data Collection Solution
When choosing a data collection solution, companies should consider several key factors:
- Determine the scope of data needs, whether solely climate-related or encompassing other ESG aspects.
- Decide between using an existing “out-of-the-box” solution or a proprietary questionnaire.
- Explore industry reporting tools to minimize duplicate requests to shared suppliers.
Enhancing Supplier Collaboration
Suppliers often receive multiple ESG-related requests from customers. Choosing a supplier climate solution that eases survey burdens increases the likelihood of collecting high-quality data. Standardized surveys that can be shared with customers provide an advantage, although they may not fully meet specific data needs. If a proprietary solution is preferred, align questions with standardized surveys to reduce “survey fatigue.”
To completely avoid direct questioning of suppliers as a first step, new options are available today through AI data pipelines. They allow companies to automatically gather climate-related ESG data of suppliers from public sources like CSR reports. This way, they can acquire data without long lasting survey processes.
Beyond data collection, companies should consider whether their selected solution supports other aspects of their engagement program, including supplier communications, resource sharing, data analytics, and data verification. Collaborating with internal stakeholders early in the process can streamline data requests and optimize systems.
Implementing the Solution
Once a supplier climate solution is identified, integrate it into the overall program implementation plan. Companies can choose a phased approach or initiate data collection with all targeted suppliers right away, depending on their strategy.
Suppliers may have concerns about data confidentiality, particularly with granular GHG inventory data. Addressing these concerns is crucial, as this information can reveal sensitive business details.
Market Recommendations by Gartner
According to the research firm Gartner, supplier sustainability applications benefit all organizations, both public and private, irrespective of size. They are vital for meeting stakeholder expectations and adapting to regulatory changes. Publishing a code of conduct is no longer sufficient; organizations must demonstrate due diligence to ensure supplier adherence. These applications enable scalability and impact, making them a valuable addition to any sustainable procurement strategy.
Key Considerations for Procurement / Sustainability Leaders
- Assess the need for a supplier sustainability application based on your sustainable procurement program’s scope.
- Create a shortlist of vendors considering the ESG issues you want to address and the necessary application capabilities.
- Prioritize vendors that emphasize supplier experience management, as supplier adoption is crucial.
- Seek a combination of tools rather than a single solution to address specific sustainability topics in-depth.
In conclusion, sustainable procurement is the way forward, and supplier sustainability applications are a powerful ally in achieving sustainability goals while enhancing supplier engagement and transparency.
A specialized solution for Supplier Climate Action
Our Climate Intelligence Platform offers a comprehensive solution to improve collaboration with your suppliers on climate actions. It automates the process of data collection, streamlining engagement with suppliers, and provides long-term tracking to improve decarbonization efforts.
Start tracking progress towards your Scope 3 targets by accessing existing data from over 35.000 companies and proceed by gathering primary data from your suppliers. Utilize the supplier-specific data to refine your company’s own greenhouse gas emission calculations and reduction tracking.
The platform is used by leading companies across industries from Telecommunication, to Automotive and Manufacturing, over Food, Energy and FMCG to reach their Scope 3 targets.
Join them in making a difference!