Three Simple Steps to Scorecard Compliance

A few weeks ago, we released our white paper on supply chain sustainability scorecards.  This paper was the result of significant research into who is using scorecards and why.  As we learned, many major industry leaders (including Dell, Ford, Google, and more) are requiring their suppliers to report on sustainability-related risks, opportunities, and achievements.  If you haven’t yet been asked by your buyer to respond to a scorecard, it’s probably only a matter of time until you are.

Why are companies driven to improve the sustainability of their supply chain? For one thing, environmental issues continue to become more pressing.  As I shared in a previous blog, reporting on water use and disposal is a 2012 sustainability trend.  This is different from some of the more passive reporting that buyers have previously demanded because it represents a shift in perspective from prevention to mitigation.  Growing concerns about environmental degradation, exhaustion of resources, population growth, and global competition are forcing the issue.  Supply chain sustainability reduces the impact of the life cycle of a company’s products by eliminating sources of waste from the manufacturing process.  Companies are realizing real savings due to these efficiencies and improvements.

There is also increasing pressure from other stakeholders including the government, NGOs, trade associations, and investors.  While the current green movement may have begun as a means to gain and retain customers, the influence that these groups have on the market means that more and more organizations are working to embed sustainability into their organization – and their supply chain.

Finally, there is growing demand for transparency, and supplier scorecards meet this need.  More companies are taking it upon themselves to voluntarily report to agencies such as the Carbon Disclosure Project (CDP) and the Global Reporting Initiative (GRI), and more are being taken to task on supply chain issues such as Scope 3 emissions reporting, energy management, product lifecycle, sustainable procurement, and socially just business practices.  Scorecards are a tangible way for large buyers to get a handle on what is happening in their supply chain and to assess their risks and liabilities.

We encourage you to proactively anticipate your buyer’s demands by taking three simple steps to scorecard compliance:

1. Find out what motivates your buyers.  By working together to meet their goals, you can not only improve your product and your bottom line, but your relationship as well.
2. Move beyond compliance.  While getting in line with a corporate mandate may have been the primary motive behind scorecard compliance in the past, the emerging trend is active participation, which ultimately benefits your company as well as your buyer.
3. Engage your C-suite.  For some, sustainability is a new business strategy that is ultimately doomed to fail without the support of upper management.  By getting your C-level executives on board now, you’ll have an easier time selling your sustainability initiatives down the road.

We’re here to help.  We’re experts in supply chain sustainability programs and can work with you regardless of your size or industry to help you realize improved profits, reduced risks, and greater engagement with your buyer.

Amy Haddon is Director of Business Operations for Renewable Choice.