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As the urgency towards climate action continues to grow, companies worldwide are looking at their supply chains to help drive sustainability and achieve their net zero goals. This was the focus of our 2024 New York City Climate Week Event "Driving Sustainability: Engaging Suppliers on the Journey to Net Zero." 

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Co-sponsored by KPMG, this event on September 25th, 2024 brought together industry leaders and practitioners alike for an evening of engaging discussion and partnership at the Impact Hub New York. Our expert panel featured Sam Stark, Founder & CEO at Green Project; Michael Hwang, Go-to-Market Sustainability Director at Microsoft; Blythe Chorn, Managing Director of Supply Chain Advisory at KPMG; and Michael Vigario, U.S. Head of Finance at ACT Group.

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Below, we'll dive into the key takeaways from the discussion, including the complexities of supply chain sustainability, the role of technology, and how to keep suppliers motivated — and not overwhelmed.

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The Growing Role of Supply Chain Teams in Climate Reporting

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Traditionally, sustainability reporting was largely the domain of corporate responsibility or ESG teams. However, this event underscored a key shift: sourcing, procurement, and supply chain teams are now at the forefront of climate action. Why? Because engaging suppliers in sustainability practices — and managing the resulting data — is essential for reducing Scope 3 emissions, which make up the bulk of most companies’ carbon footprints.

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The panelists highlighted that data transparency and effective communication between suppliers and purchasers are critical components of building more resilient, climate-conscious supply chains. By leveraging sustainability data, companies can not only reduce emissions but also create a solid business case that doesn’t necessarily have to center on sustainability alone. For instance, data can be used to enhance resilience to disruptions, highlight inefficiencies, and ultimately drive cost savings — all of which add value beyond just the environmental impact.

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Balancing Data Collection with Supplier Engagement

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One of the primary challenges discussed was how companies can engage their suppliers in sustainability efforts without overwhelming them. The panelists pointed out that many suppliers are currently experiencing “survey fatigue” — the exhaustion that comes from receiving numerous, and often repetitive, requests for sustainability data. This fatigue can result in disengagement, making it difficult for companies to collect the information they need to report on their sustainability progress.

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To address this, the speakers stressed the importance of balancing data requests with meaningful engagement. Educating suppliers on the mutual benefits of data transparency — such as potential cost savings, new business opportunities, or operational improvements — can help to foster collaboration. In addition, developing concise surveys and focusing on the most critical metrics can help alleviate the burden on suppliers.

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Organizations need to recognize the limitations of their leverage. There’s only so much you can ask of suppliers before they start feeling overwhelmed, and that’s when the data collection process becomes counterproductive.

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Instead of inundating suppliers with numerous requests, purchasers should aim to focus on quality over quantity, being strategic about which data is necessary and ensuring that suppliers understand why it matters.

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Incentivizing Collaboration and Leveraging Technology

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Another key takeaway from the discussion was the role of incentives in engaging suppliers. Companies must look beyond data collection to actively motivate suppliers to participate in sustainability initiatives. Providing incentives — whether through recognition, rewards, or preferred supplier relationships — can be a powerful way to encourage suppliers to share valuable sustainability data.

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The speakers also discussed how offering resources, such as training sessions or access to technology, can make it easier for suppliers to take action. When suppliers understand the value of sustainability and have access to the right tools, they’re far more likely to engage actively in these initiatives. By offering education, training, and technology, companies can help suppliers understand the broader benefits of sustainability and make the necessary changes with fewer barriers.

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Investing in technology to facilitate data collection and management is another important step in this process. For example, using platforms like Green Project to automate data sharing can significantly reduce the time and effort required for both purchasers and suppliers, making collaboration more seamless and reducing friction.

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Managing Scope 3 Emissions with Strategic Engagement

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Managing and reducing Scope 3 emissions remains one of the biggest challenges for companies on the journey to net zero. The emissions that occur throughout a company’s value chain — from raw material extraction to transportation, and even product use — are difficult to quantify and even harder to control. To effectively address Scope 3 emissions, companies need a strategic approach that involves all stakeholders, especially suppliers.

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The panel emphasized that by identifying where buyers have the most influence over their supply chains, they can focus their efforts on areas with the highest potential impact. The growing demand for sustainable practices presents a huge opportunity — if we can incentivize and support suppliers in making these changes, the cumulative impact will be significant.

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In this context, collaboration is key. Engaging suppliers isn’t just about collecting data — it’s about creating a partnership that brings value to both parties. By offering education, training, and resources, companies can ensure that their suppliers are equipped to participate in sustainability initiatives and understand the shared benefits of doing so.

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The Path Forward

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The ultimate goal of all of these efforts is to create resilient, sustainable supply chains that can adapt to changing demands — both from a climate and a business perspective. By engaging suppliers thoughtfully, balancing data requests, and providing the tools and incentives needed for action, we can take a significant step forward on the path to net zero.

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Green Project remains committed to supporting companies in this endeavor, offering tools and expertise to make supplier engagement simple and effective. If you'd like to learn more, let's talk.

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