As costs rise across almost every major category, consumers are becoming more intentional about their spending. They want to be sure their dollars are supporting firms that share their values. This has put a sharper light on ESG scores and responsible sourcing practices at a time when many firms are finding it difficult to accurately assess whether or not their suppliers are capable of meeting standards and maintaining a reliable flow of goods and materials.
In fact, some 65 percent of CFOs and other top executives report that they aren’t able to get good ESG data from suppliers, according to a recent Sapio research survey. In a follow up survey of 800 executives across six countries by Coupa Software, a further 53 percent say that even though they know their spending can influence supplier behaviors, it’s not always clear how to get the transparency they want and need for reporting requirements, especially from lower-tier suppliers. One possible solution? Doing more to support first-tier and lower-tier suppliers in developing their own internal ESG reporting systems and programs. This can move things along quickly while ensuring that data points map cleanly to reporting targets, creating the kinds of metrics that make regulators and consumers happy. While this will need to be customized for each supply chain, firms that are already making these investments can provide guidance to others.
Amgen: Collaborating on sustainable, responsible R&D
Amgen, a biotech firm with footprints on multiple continents, has made collaborating with suppliers on sustainability points a key part of its supplier development. The company often must deal with environmentally sensitive raw materials and waste chemicals, particularly at research labs and manufacturing sites that may be serviced by a number of lower-tier suppliers. However, the company has also made a large public commitment to green chemistry that needs to be maintained throughout the supply chain.
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