Learn about the essential supplier information that should be included in your organisation's sustainability report.

Supplier Information You Must Include in Your Sustainability Report

Sustainability has become a key focus for companies seeking to reduce their environmental impact and promote social responsibility. Supplier information is a crucial component of any sustainability report, as it provides valuable insights into a company's supply chain and overall sustainability performance. Understanding the impact of suppliers on your sustainability initiatives is vital for driving effective change and making informed decisions. In this article, we will explore why supplier information is essential for sustainability reporting and discuss the various aspects you should consider when collecting, analysing, and utilising this data.

Why Supplier Information is Vital for Sustainability Reporting

When it comes to sustainability reporting, comprehensive and accurate supplier information plays a critical role in helping organisations identify potential risks, monitor performance, and develop strategies for improvement. Suppliers are integral to a company's operations, and their practices can significantly impact environmental, social, and economic aspects. By including supplier information in your sustainability report, you gain a clearer picture of the sustainability performance throughout your supply chain, enabling you to identify areas for improvement and drive positive change.

Sustainability reporting is no longer just a regulatory requirement; it has evolved into a tool for companies to demonstrate transparency and build stakeholder trust. Including supplier information showcases your commitment to responsible sourcing and helps you address concerns related to human rights, labour practices, environmental impacts, and ethical sourcing. By disclosing this information, you demonstrate accountability and set a benchmark for your suppliers, encouraging them to align their practices with your sustainability goals.

Moreover, supplier information provides valuable insights into the resilience of your supply chain. Understanding where your suppliers source their materials, their production processes, and their social and environmental policies can help you assess the overall sustainability risks within your supply chain. This knowledge is crucial in mitigating disruptions, ensuring business continuity, and fostering long-term relationships with suppliers who share your sustainability values.

Furthermore, by engaging with your suppliers on sustainability issues, you can drive innovation and collaboration. Encouraging suppliers to adopt sustainable practices not only benefits your company's reputation but also fosters a culture of continuous improvement within the supply chain. Collaborating with suppliers to set mutual sustainability goals and sharing best practices can lead to shared value creation and a more resilient, sustainable supply chain ecosystem.

Learn about the supplier engagement initiatives implemented by top-performing companies and their importance on the companies’ decarbonisation journey.  

Understanding the Impact of Suppliers on Your Sustainability Performance

As the saying goes, "You are only as strong as your weakest link". In the context of sustainability, this rings true for your suppliers as well. In order to assess and improve your sustainability performance, you need to understand the impact of your suppliers on your overall sustainability goals. Your suppliers' practices, such as energy consumption, waste management, and emissions, can significantly affect your carbon footprint and sustainability metrics.

By analysing supplier information, you can identify high-impact areas and collaborate with suppliers to implement sustainable practices that align with your values. For example, if a significant portion of your carbon emissions stems from transportation, understanding your suppliers' logistics operations can help you develop strategies to reduce emissions or explore alternative transportation methods. Similarly, if your suppliers engage in unethical labour practices, you can work with them to improve working conditions and ensure fair wages, thus enhancing your overall social sustainability performance.

Key Data Points to Collect from Suppliers for Your Sustainability Report

Collecting relevant and accurate data from suppliers is crucial for a comprehensive sustainability report. The specific data points you collect will depend on your industry, geographic location, and sustainability goals. However, there are several key data points that are commonly included in sustainability reports:

1. Energy usage and greenhouse gas emissions: This includes both direct emissions (Scope 1) from operations and indirect emissions from purchased electricity (Scope 2).
2. Waste management: Information on waste generation, recycling rates, and disposal methods.
3. Water usage: The amount of water consumed and relevant water conservation measures.
4. Supply chain transparency and traceability: Assurance that your suppliers adhere to ethical and responsible practices, including information on raw material sourcing.
5. Labour practices and social impacts: Ensuring fair labour practices, safe working conditions, and fair wages throughout your supply chain.

These data points provide a comprehensive view of your supply chain's sustainability performance and enable you to track progress over time. By collecting this information, you can identify areas of improvement, set targets, and engage with suppliers to drive positive change.

Additional and more detailed supplier information you must include in your report will also depend on the sustainability frameworks that you are following. Common frameworks used to measure supplier performance are:

• Global Reporting Initiative (GRI)
• Carbon Disclosure Project (CDP)
• International Sustainability Standards Board (ISSB)
• The GHG Protocol
  

For instance, the GHG Protocol offers guidance for companies in preparing their GHG emissions inventory by categorising emissions into three scopes:

• Scope 1: Direct emissions from company operations, such as fuel used in vehicles.
• Scope 2: Indirect emissions from the purchase of electricity, heat, and cooling.
• Scope 3: Indirect emissions from the entire value chain, including goods and services purchased, which often represent over 80% of a company’s total emissions.

Understanding where your emissions come from is crucial for identifying reduction opportunities, setting reduction targets, and managing your overall emissions to achieve your sustainability goals.

If you are just starting to reach out to your suppliers to get data for your report, check out our blog on the 5 Questions You Need to Ask Your Suppliers for Your Emission Report. It breaks down the essential questions to get you and your supplier to spark the conversation about ESG and get inspiration from a leading Australian company’s questionnaire that had boosted their supplier engagement.

Best Practices for Engaging Suppliers in Sustainability Reporting

Engaging suppliers in sustainability reporting is a collaborative effort that requires effective communication, clear expectations, and mutual benefits. Here are some best practices to consider when involving suppliers in your sustainability reporting:

• Establish clear sustainability expectations: Clearly communicate your sustainability goals and expectations to suppliers to ensure alignment and encourage collaboration.
• Provide guidance and support: Offer resources, training, and tools to help suppliers improve their sustainability practices and data collection.
• Collaborate on improvement initiatives: Work closely with suppliers to develop joint strategies and initiatives that drive positive change throughout the supply chain.
• Recognise and reward progress: Acknowledge and celebrate suppliers' efforts and achievements in sustainability to foster a culture of continuous improvement.

By adopting these best practices, you can create a collaborative and transparent relationship with your suppliers, leveraging their expertise and resources to enhance your sustainability performance.

Know more about how to engage effectively with your suppliers:

Best Practices for Supplier Selection: A Guide for Sustainable Procurement

What to Avoid in Communicating with Companies Who Ask for Your ESG Data

How to Ensure Accuracy and Reliability of Supplier Data in Your Report

When including supplier information in your sustainability report, it is crucial to ensure the accuracy and reliability of the data. Only accurate or complete data can lead to accurate reports and maintain the credibility of your sustainability efforts. Here are some steps to ensure the accuracy and reliability of supplier data:

1. Establish data collection protocols: Clearly define data collection methods, standards, and formats to ensure consistency and comparability.
2. Verify data through audits and certifications: Conduct regular audits and work with certified organisations to verify the accuracy of supplier data.
3. Provide templates and tools: Offer templates, guidelines, and automated reporting tools to suppliers to facilitate accurate data collection and submission.
4. Engage in data quality checks: Implement comprehensive data validation processes to identify and rectify any anomalies or errors.

By implementing these measures, you can enhance the reliability of your supplier data and ensure its usefulness in evaluating your sustainability performance.

Leveraging Supplier Information to Drive Continuous Improvement in Sustainability

Supplier information should not be limited to just reporting; it should be utilised to stimulate continuous improvement. By analysing supplier data, identifying trends, and benchmarking against industry standards, you can develop targeted improvement strategies and collaborate with your suppliers to drive sustainable change.

Engage in open dialogue with suppliers, share best practices, and encourage innovation to explore new environmentally friendly materials, processes, or technologies. By leveraging supplier information, you can foster a culture of continuous improvement, empowering suppliers to take ownership of their sustainability efforts and contribute to the overall success of your sustainability initiatives.

Addressing Challenges in Obtaining and Verifying Supplier Information

Obtaining and verifying supplier information can present several challenges. Some suppliers may be hesitant to provide data due to concerns about disclosing confidential information or because they lack the resources and capabilities to collect and report sustainability data. Addressing these challenges requires close collaboration and proactive measures:

• Establish clear communication channels: Maintain open lines of communication with suppliers, address their concerns, and emphasise the value of sustainability reporting.
• Offer support and resources: Provide guidance, training, and templates to help suppliers collect and report sustainability data effectively.
• Collaborate with industry partners: Engage in industry collaborations to harmonise reporting requirements and share best practices in obtaining supplier information.
• Recognise and incentivise participation: Recognise and reward suppliers that actively participate in sustainability reporting to encourage greater engagement.

By addressing these challenges head-on, you can overcome barriers and ensure a more comprehensive and accurate representation of your supply chain's sustainability performance.

Future Trends in Supplier Information Reporting for Enhanced Sustainability Efforts

The field of sustainability reporting is continually evolving, and new trends are emerging that will shape the future of supplier information reporting. Here are some key trends to watch out for:

1. Technology-driven data collection: Advancements in technology, such as blockchain and artificial intelligence, will simplify data collection, enhance accuracy, and enable real-time monitoring of supplier sustainability performance.
2. Increased focus on social sustainability: There will be a stronger emphasis on social sustainability aspects, including human rights, diversity and inclusion, and community engagement, driving organisations to collect more robust supplier data in these areas.
3. Enhanced supply chain transparency: Stakeholders, including consumers and investors, are demanding greater transparency in supply chains. This will drive organisations to collect more detailed supplier information, including traceability and certifications.
4. Integration of sustainability into procurement practices: Organisations will increasingly consider sustainability performance as a critical criterion during supplier selection, procurement, and contract negotiations. Check out our blog on Low Emission Procurement and Supplier Selection Guide.

As the sustainability landscape continues to evolve, organisations must stay ahead of these trends and adapt their sustainability reporting practices to maximise the positive impact on both their operations and society as a whole.

Conclusion

Including comprehensive supplier information in your sustainability report is essential for a greater understanding of your company’s environmental and social impacts. The supplier information that your company must include in your sustainability report depends on the standards and frameworks you adhere to. However, the most common and essential data points to collect from suppliers include their energy usage, greenhouse gas emissions, waste management practices, water usage, supply chain transparency, and labour practices. This information not only helps in identifying high-impact areas and setting improvement targets but also fosters stronger, more sustainable partnerships. By engaging and integrating their data into your sustainability efforts, you can drive significant progress towards your sustainability goals, enhance your brand image, and ensure long-term business resilience.