If supplier engagement is tough for you …. What about for your suppliers?

Read on for the takeaways from the three rounds of our CEBA roundtable discussion at Verge22 – “Carrot or stick-how do you motivate your critical value chain partners to commit to an emissions reduction strategy?”

These roundtables were part of CEBA at VERGE22 and centered around renewable energy.

The wide variety of participants at the 3 roundtables shared the keys to success and challenges they have experienced in engaging their suppliers on reducing emissions.  Against the challenges, potential solutions were brought forth.

It is important to not that all participants expressed a great deal of empathy for their suppliers and the difficulties they are facing.

Among the successes: Companies are seeing suppliers becoming increasingly knowledgeable about and willing to engage with companies on sustainability issues. Some of the participants group suppliers based on their maturity and develop tailored plans based on how far along suppliers are in their sustainability journey. With mature suppliers the engagement is around emission reduction plans and actions, for those suppliers just starting – the engagement focuses on training and beginning the data collection process to calculate emissions.

Another successful solution is the creation of multiple communication channels with suppliers – including 1:1 engagement, educational webinars, incentivization strategies, providing implementation assistance, and being a connector between suppliers and the resources they need to facilitate data collection or emission reduction strategies.

Another key to success is to Start Now!  Even the most advanced corporations have only just started engaging their suppliers over the past 1-3 years.

Common challenges: Participants expressed that engaging smaller suppliers, especially those in markets with more challenging renewable procurement (e.g. Asia), is a challenge they are grappling with.

Another shared challenge is supplier fatigue around 1) the multiple disclosure questionnaires they are asked to complete by their customers, and 2) the emergence of proprietary and/or trademarked solutions to collect data from suppliers. The fact that there are multiple and different asks, instead of standardized and transparent approach, places a huge burden on suppliers, and supplier fatigue leads to resistance.

Supplier engagement solutions: Participants discussed several ways they are looking at to further facilitate supplier engagement. One way is to aggregate suppliers’ renewable energy demands by working with local utility markets to secure renewables in difficult areas.

Another option discussed is leveraging RE100 to assist with connections between companies facing difficulties in procurement and renewable sources.  One supplier alone might not have the critical size to influence contracts or regulations in a market where RE access is difficult, whereas companies that aggregate multiple suppliers and potentially even join forces with other companies might be able to effect change.

Participants also discussed the need to put policies in place to standardize the approach to collecting and allocating data from suppliers.

The sessions resulted in several outstanding questions. How can we …

• …effectively scale supplier engagement?
• …prevent supplier fatigue in answering survey requests?
• …share data efficiently (e.g., is CDP a possible solution)?
• …validate data (e.g., standardize data, trust methodology, and track progress)?

Thank you to all our participants and the insights you shared!