Suppliers are at risk of “fatigue” due to the mounting requests of buyers working towards their ESG commitments, delegates were told at an event.
Talking on a panel at CIPS Sustainable Procurement Summit, responsible sourcing group AIM-Progress’s executive director Louise Herring said: “The more we try to engage suppliers on issues, the more risks we have about supplier fatigue, exhaustion, mission, data.”
Sky director of sustainability and compliance - group supply chain, Dionne Rickards, said surveys and ongoing conversations with suppliers are necessary to build awareness and transparency, but with many firms pursuing the same information buyers risk over-burdening them.
Rickards said: “There are too many surveys that go to suppliers. And it's broader than just human rights. It's net zero, it's cybersecurity, its data protection, it's ongoing and continual. So what we've done is tried to be selective about who we're partnering with.
“My recommendation would be to be targeted, what information do you need? And is there something out there or any tech that can aggregate it for you?”
She added that it requires procurement to be “in tune” with the rest of the business.
“Another area of your business may think, ‘I want to understand more about my suppliers’, and they might start bombarding suppliers at a sensitive time.”
In response, Sky has aggregated risk-based questions into a single document which is sent to suppliers, and also distributed to other departments within the firm as a means to streamline the process and avoid suppliers being asked the same questions several times by different departments.
Food manufacturer Princes Group’s global head of environment and social sustainability, Paul Williams, added survey fatigue risks suppliers “disengaging” if they are repeatedly asked the same questions without being given the opportunity to improve.
Consequently, procurement teams need to be conscious of the capabilities of the suppliers they are dealing with, he said.
“Ultimately it comes back down to the level of resources those suppliers have for sustainability. Typically, we find the sustainability leaders are also the technical leaders, the factory managers, and they may also be the HR managers.”
It requires a “creative” and “innovative” response from buyers to engage with those suppliers.
“I think the only way to engage with suppliers is really to demonstrate best practice yourself. So whether that's helping with webinars, briefing sessions, but also simple things like adding it onto the agenda for all meetings,” Williams said.
“We've done it with all of our tier one and tier two suppliers, so that it hopefully filters down. If that tier one or tier two supplier doesn't have the answer to our questions on sustainability, they will start asking the same question to their supply chain. It builds momentum.”
Williams outlined how Princes Group has provided all of it's Italian tomato growers with longer term contracts to ensure they are better equipped to invest in sustainable solutions due to improved stability.
Net zero, human rights and due diligence issues “can't be solved on a one-year basis,” he said. “These are multi-year, multi-decade issues, opportunities and challenges that we need to solve. If you currently work on a year-by-year contract basis, it's not unreasonable for the supplier to say, ‘how do you want me to invest in these initiatives to drive it forward?’.”
Williams added: “The important thing when we talk about paying more to suppliers is the cost of not. Behaving sustainably and ethically – which is really difficult to quantify – is pivotal in terms of saying to suppliers, if you do not improve and demonstrate this level of traceability and transparency, the result could be that you don't win any business.”
Just Eat procurement risk and sustainability lead, Andrew Slater, added buyers must “speak suppliers’ language” and “incentivise” them.
“We've been really vocal in our sourcing policy. We will tell suppliers, ‘we're going to evaluate you on your sustainable credentials’, that includes labour and human rights. We need to see efforts from you that show your commitment to the cause and you're on the right journey with us,” he said.
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