Study: Suppliers need to focus more on sustainability

Not too long ago, businesses treated sustainability as little more than a regulatory obligation or a hippie call to action. Today though, corporate social responsibility is becoming a serious priority among leading institutions like Wal-Mart and Microsoft, and they’re making efforts to bring their supply chains in line with the new green mindset. However, a new report finds suppliers are well behind their larger partners in the sustainability game, and if businesses want a shot to succeed alongside leading firms, they might need to consult with supply chain recruiters to find eco-focused talent.

Suppliers lack emission level targets
A significant disparity exists between supplier and purchaser sustainability levels, according to recent findings in Reducing Risk and Driving Business Value, released by the Carbon Disclosure Project. The environmental advocacy group surveyed 52 major purchasing corporations and 2,363 of their global suppliers.

The study found a serious chasm between supplier and purchasing emission reduction goals. Ninety-two percent of purchasers had plans to reduce carbon emissions, but only 38 percent of suppliers pursued such initiatives. Sixty-nine percent of CDP Supply Chain Members had invested in emission reduction technologies, but just 27 percent of responding suppliers had done the same.

The root of the problem goes beyond emissions and resides in the basic understanding of sustainability among suppliers. Seventy-nine percent of purchases could identify regulatory, physical and climate change-related risks that could potentially affect future operations. However, just 31 percent of suppliers recognized such risks. Because sustainability is such an important theme moving forward, businesses not in the know should work with supply chain recruiters to find talent that can – at the very least – formulate a basic understanding of the environment and business relationship.

Sustainability improves performance
The ignorance of some suppliers in regard to sustainability puts them well behind forward-thinking businesses. For example, the 29 percent of suppliers that indicated they had met emission level reduction goals in 2012 saved $13.7 billion as result. The report noted if all suppliers had done the same, the savings could be triple that number.

Sustainability also enhanced other elements of business. Nineteen percent of respondents said improving their reputation was a key driver behind sustainability efforts. Twenty-three percent cited changing consumer behavior as another important motivator.

The world is becoming more green-minded and corporations of all sizes are following suit. But for those still unsure about greenhouse gas emissions and other environmental topics it may be time to partner with supply chain recruiters and hire talent that can shift company culture and embrace sustainability.