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In most organisations, suppliers account for more than 60% of the value chain. Implementing sustainable thinking when it comes to suppliers can have a huge impact on a company's sustainability impact and beyond.
When it comes to sourcing new suppliers or products, embedding sustainability criteria and carbon calculation is recommended.
When it comes to the existing supplier base, starting the conversation and driving the supply chain to higher standards on carbon emissions, circularity or labour rights has been proven to strengthen the relationship and add value for both parties.
Preliminary Note:
Steps to take:
1- Analyse your current comsumption and existing practices
2- Define Targets and KPI evolution, such as
3- Prefer
4- Make it simpler
5- Packaging: Discuss with your supplier to limit packagings, e.g. all pens in 1 carton box.
6- Involve all stakeholders in the sustainable purchasing policy and train them
Refer to the global sustainable procurement policy in Resources section for more details.
Sustainable procurement is the integration of Corporate Social Responsibility (CSR) principles into your company’s procurement processes and decisions while ensuring they still meet the requirements of your stakeholders. To be successful in your sustainable procurement journey, it is recommended to:
Then to have a relevant impact, the conventional procurement process needs to be enhanced with sustainability-related activities:
Internal Spending & Market Analysis: In addition to the "standard" activities, it is necessary to ensure sustainability transparency throughout the supply chain (tier 1, tier 2, etc.), assess supplier sustainability, define sustainability targets by category and qualify sustainable suppliers.
Tender management: This should include incorporating sustainability questionnaires and assessments into tender documents, as well as analysing and validating suppliers based on their sustainability maturity.
ESG screening & ESG assessments: ESG screening is applicable or new suppliers at the pre-qualification step. For existing suppliers, it is recommended to conduct ESG assessments (in house, EcoVadis). The objective is to measure the integration levels of environmental, social and governance sustainability principles in the organisation's strategies, policies, and activities of your suppliers.
Negotiation & contract awarding: Sustainability targets should be included in supplier negotiations, sustainability performance should be considered in supplier selection, and sustainability key performance indicators (KPIs) should be included in contracts.
Implementation: Once supplier selection has been communicated, ERP systems (suppliers, prices, products/services) updated and operational implementation initiated, it is crucial to monitor sustainability performance through regular audits. This should be integrated into the supplier evaluation process.
ISO 20400:2017, titled "Sustainable Procurement - Guidance," is an international standard issued by the International Organization for Standardization that provides organizations with a framework to integrate sustainability into their procurement processes.
Creating and implementing a supplier code of conduct is the first step to take for a sustainable supply chain.
Establishing a supplier code of conduct presents a chance for your company to foster a shared understanding with your suppliers regarding your fundamental principles and values. This will also aid in attracting suppliers whose values align with yours, while also providing clarity to discern mismatches. Moreover, it serves as a protective measure against potential risks and fosters transparent communication between your company and your suppliers. It should cover at least labor, environment, and ethics.
Measuring Scope 3 carbon emissions (upstream and some downstream activities) presents significant challenges. Achieving comprehensive supply chain decarbonisation, particularly in partnership with suppliers, is complex.
It is crucial to collaboratively establish clear decarbonisation goals with suppliers, incorporating these objectives as specific criteria in sourcing and purchasing decisions.
However, merely setting goals is insufficient; companies and their suppliers must work in tandem to achieve the targets set.
A pivotal strategy involves engaging suppliers with the highest emissions, directing attention towards categories that the company aims to influence.
The calculation of priorities can be based on either physical quantities or expenditure.
Subsequently, it is advisable to encourage suppliers to actively reduce their carbon footprint, involving the measurement of Scope 1, 2, and 3 emissions. Suppliers should be motivated to commit to quantified reductions, aligning with the Paris Agreement and ideally gaining approval from the Science Based Targets initiative (SBTi). Some companies as part of their SBTi Scope 3 target, ask their own suppliers to commit to SBTi. Navigating this delicate negotiation with suppliers is crucial to avoid becoming an undesirable customer.
A constructive approach is to provide support to suppliers. This can include training, workshops, technical guidance, and the provision of tools such as software and calculation files. Establishing a structured Supplier Progress Plan is paramount to achieving success in the pursuit of decarbonisation goals.
When screening for new suppliers, it is now fundamental to request information and documentation on the suppliers ESG policy as part of your qualification process.
Gather information about potential suppliers through their websites, annual reports, or sustainability reports. Look for certifications such as ISO 14001 (environmental management) or SA8000 (social accountability) to gauge their commitment to sustainability. Find their Ecovadis scoring.
You can also develop a questionnaire to assess the new suppliers' sustainability practices. Ask about their environmental policies, waste management, energy usage, labor practices, supply chain transparency, and any initiatives they have implemented to reduce their environmental footprint.
When companies purchase goods and services, they join a global supply chain where human rights violations, such as forced labour and unsafe working conditions, are unfortunately common.
Environmental damage can also impact human and indigenous rights, affecting living standards and cultural practices.
Integrating human rights requirements into procurement practices over time improves the human rights performance of suppliers and companies.
- Starting with due diligence on key suppliers and considering social and environmental impacts throughout the product lifecycle is crucial.
- Establishing minimum and desired criteria, signalling expectations through a supplier code of conduct, and supporting suppliers in meeting these expectations are essential steps.
- Regular audit and evaluation ensures progress and identifies areas for improvement in upholding human rights standards.
Human rights concerns related to the workplace include impacts on:
Human rights concerns related to broader freedoms and entitlements include impacts on:
As per the Science Based Target Initiative (SBTi), effective management requires accurate measurement. The initial hurdle lies in quantifying the company's carbon emissions. Particularly in sectors where scope 3 emissions are significant, the Procurement function tends to prioritise this aspect. However, this focus limits the Procurement department's potential impact on scope 2 emissions.
For instance, negotiating contracts for the purchase of green energy, such as Power Purchase Agreements (PPAs), can be a valuable strategy, especially in the context of significant energy price inflation.
The "Energize program" initiated by the pharmaceutical industry to access decarbonisation solutions in terms of renewable electricity is a good example.
The transition towards decarbonisation is poised to significantly increase the volume of data that purchasers must manage. This transformation will require a reassessment of Suppliers' strategies.
A top-tier procurement platform should seamlessly embed components pertinent to suppliers' decarbonisation endeavors across all stages of the procurement process. This requires the incorporation of a comprehensive decision-making tool, thus eliminating the need to rely on disparate data sources. To achieve this, the platform should establish links with specific decarbonisation repositories, encompassing emissions factor databases and platforms referencing entities like CDP and SBTi.
Moreover, integration with premium digital solutions, such as EcotransIT World for calculating transportation emissions, is essential to ensure a robust and efficient approach.
According to Natacha Trehan, at the Supplier level, the ideal platform should include
Not all elements are currently integrated into all procurement platforms, but good progress is being made.
Promoting reuse is beneficial. For a company to effectively reuse goods, accessibility is key. Business-to-business (B2B) digital platforms play a pivotal role in connecting suppliers and buyers who may not have prior connections.
From the seller's perspective, selling surplus or second-hand equipment, as well as deconstruction materials, not only generates additional turnover but also significantly reduces the company's CO2 footprint.
On the buyer's side, there are both financial and CO2 savings to be gained.
Customers do not simply purchase a product; they seek a performance-based, tailored solution.
Servitisation, also known as Product-as-a-Service, where products transition into services, is enabled by digitalisation capabilities such as sensor data collection and artificial intelligence to optimise asset conditions and consumption.
For example, the supplier commits to delivering energy-efficient performance to reduce the customer's carbon footprint. Instead of buying individual cooling or heating systems, the buyer can opt for an energy efficiency service, where the supplier designs, builds, operates, and maintains the facilities on behalf of the customer.
In a traditional model, suppliers aim to sell more equipment and consumables, often neglecting product lifespan. Conversely, customers aim to minimise goods replacement, leading to conflicting interests.
In a functional model, the supplier retains ownership of goods, incentivising quality optimisation and prolonged use. This is the end of planned obsolescence. With fewer manufactured products having longer lifespans, there's a reduced carbon footprint.
Central to this transformation is servitisation: the shift from traditional business models to outcome-based, Product-as-a-Service (PaaS) models. Companies are now compelled to rethink and revamp their service models to remain relevant in this evolving landscape.
Having a carbon simulator for procurement means having a carbon footprint per product.
To achieve this objective, 3 steps are recommended:
The Procurement Carbon Footprint Simulator serves as a decision-making tool, focusing on gathering activity data (e.g., kg, km, kWh) for the key carbon drivers during significant phases of the product life cycle, such as raw materials, production, transport, and packaging. The resulting CO2 emission value is determined using an internal price per tonne of carbon chosen by the company.
This simulator aids the company in making informed sourcing decisions, emphasizing the optimisation of the carbon impact-to-cost ratio as a criterion for reorienting the sourcing strategy. For instance, the buyer may need to consider various options, such as choosing recycled packaging over cardboard packaging or selecting a supplier closer to the factory with road freight versus a supplier farther away but reachable via railway.
The « sustainability journey » may feel overwhelming sometimes, but you are not alone.
Our Buddies have tried, succeeded, failed to implement change in their companies. They share their experience so you can learn, take shortcuts, get inspired and ask questions.
Everybody can become a Buddy and give back to the community; if you are keen, get in touch with us.
I am a leader in Procurement with over 15 years of experience spanning diverse industries such as Energy, Rail and Maritime across regions including Europe, Australia and Singapore. I believe Procurement has the huge responsibility to influence the supply chain to make a difference for our planet and communities. This belief fuels my passion and elevate my ambitions. There are countless opportunities to embed sustainable practices in Procurement, which fascinates me!
I have over 15 years experience in Responsible Value Chain. I started as a Sustainable material experts to slowly cover the entire Value chain and life cycle of products.
I am Naomi, currently co-founder & director of givvable. I started my career as an Australian diplomat with postings in East Timor, Thailand and Switzerland then moved into private banking where my interest in ESG and sustainability was seeded.
Today my company helps businesses screen and track the sustainability profile of their suppliers to help them achieve their goals and targets.
In 2003, I joined International SOS, world leader of medical and security assistance services and relocated to Singapore in 2008 where I have spent my life since. I held different regional leadership roles and I was a founding member of the Sustainability Committee and initially led the S (Social) part. I was also leading the Environment pillar, with a special focus on the Ecovadis certification.
I enrolled at SMU back in Sept 2020 and graduated from the Sustainability and Sustainable Business executive masterclass in Dec 2020. In July 2021, I joined a local singaporean startup H3Dynamics with the ambition to decarbonize the aviation industry! And since May 2023, I am now the managing director AsiaPacific for Ecocert, world leader in certification for organic products. I am also the Singapore Ambassador (volunteer) for Ecomatcher to help brands fight climate change, one tree at a time.
Finally, I am a French Trade Advisor and part of the Sustainability Committee to strengthen bridges between France and Singapore on this crucial agenda.
Founder and Director of the consulting business Zero Waste City, Rémi provides engineering consulting services to large commercial and industrial facilities on waste management, energy efficiency, and packaging design.
He has gained a strong experience as a consultant covering a wide range of industries and technologies in New Zealand, Australia, and Singapore.
He is a certified TRUE Advisor (Total Resource Use Efficiency) by the U.S. Green Building Council Inc. This certification recognised his knowledge in Zero Waste programs and his ability to support businesses to achieve the TRUE Zero Waste certification.
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Sammie is the Director of Social Impact & Sustainability at Williams-Sonoma.
At Williams-Sonoma, she collaborates with leadership across the business to achieve the goal of 75% of products purchased from suppliers who offer worker wellbeing programs by 2030.
She is a CSR practitioner with 20 years of experience. She has managed CSR and sustainability programs at Target, C&A, Abercrombie & Fitch, and American Eagle Outfitters.
Mun Wei is the founder and principal consultant of SustainableSG, which provides advisory and training services in sustainability, strategy, risk and entrepreneurship.
He has worked with corporate, government and non-profit clients on strategy and implementation, reviewing organizational programmes and targets related to the UN Sustainable Development Goals, benchmarking and communicating sustainability and other corporate programmes and achievements, promoting inclusive hiring, developing compliance policies and reports, and formulating innovative business models.
He is also an Adjunct Lecturer at the Singapore University of Social Sciences.
With a background in sustainability consulting and audit, Ivona supports businesses in their sustainability journey by building an impactful strategy, embedding sustainable practices across operations, and reporting performance to stakeholders.
She is the founder of Sustainao, a Singapore-based company specialized in sustainability consulting. Previously, Ivona worked as a sustainability auditor at KPMG France. She holds an MBA in CSR & Sustainability and a Master’s degree in Environmental Management.
Entrepreneurial by nature, Claire started ShiokFarm in 2015 when realising the high prices for organic fruit and vegetables in Singapore. Based on the French AMAP model, in which Farmers and a community create a partnership in order to reduce food waste and cost, ShiokFarm aims to provide families and offices in Singapore with affordable organic fruit and vegetables while reducing food waste.
Starting with a small Facebook group, Claire has succeeded in making ShiokFarm an outstanding organic business. ShiokFarm received its BCorp certification in 2023.
I work at Terrascope, which offers an end-to-end decarbonisation SaaS platform that enables enterprises to measure and manage their Scope-1, Scope-2 and Scope-3 emissions across operations, supply chains, and portfolios. As Climate Regulations Specialist, I help ensure that our product stays ahead of the regulatory curve and advise clients to navigate the dynamic and complex climate regulatory landscape.
Prior to joining Terrascope, I worked at EcoVadis - a global ESG ratings company - where I launched its Singapore office which served more than 800 companies within its first year of operations. The ratings include environmental, social, ethics and sustainable procurement metrics.
I started my career with the Singapore Government, spanning portfolios including manpower, education, transport and decarbonisation. I also helped spearhead the government's measures to fight Covid-19.
I graduated from the London School of Economics, SciencesPo Paris, and Oxford University. As an undergraduate at Oxford, I helped launch the inaugural Oxford Climate Forum - the UK's largest student-run climate change event.
I'm passionate about walking the talk, breaking the silos within sustainability and making pathways relevant for all walks of life (especially heavy industry) to diversify their current standard operating procedures.
Ex-fashion designer and entrepreneur, Roxane first started in the fashion industry holding several Head designer positions for high-end and high street activewear brands, leading product development from specs and material sourcing to supply chain management and production. She, then, went on an unexpected and career changing entrepreneurial journey, which included co-founding barePack, a container-sharing business in Singapore.
Roxane has also been engaged as a public speaker and expert advisor for all matters regarding sustainable materials and textiles, plastics economy, circular packaging, reuse models and recycling. She is currently a Sustainable Fashion Advisor and Curriculum Developer at the Textile and Fashion Industry Training Centre (TaF.tc), delivering sustainability curriculum and support to students and management, respectively, and board advisor to the materials traceability and circularity platform Orobo.
Tomo is a seasoned development professional having lived and worked in various corners of the world from the Tibetan plateau, Indian drylands, Indonesian tropics, to Japanese metropolises. He has extensive field experience working for international and local development NGOs across Asia and Africa, including Kopernik, the Children’s Investment Fund Foundation, and the World Bank. He was formerly an Assistant Professor at the Global Leadership Program at the University of Tokyo.
Tomo has a BA in Social Anthropology from Harvard College, a Masters in Public Policy from the Harvard Kennedy School, and was an Asia Pacific Leadership Program Fellow (2008) and Innovation Fellow (2020) at the East-West Center. In 2014 Tomo was awarded the Dalai Lama’s Unsung Heroes of Compassion Award.
I have more than 20 years experience leading change and transformation in Europe, Africa and Asia. I have had the privilege of managing and contributing to diverse industries, organisation (Humanitarian and corporate) to secure engagement and impact. In my last role I worked in a large MNC supply chain environment engaging external partners to increase our impact in sustainability.
