Effective engagement with suppliers is a vital element of implementing sustainable procurement practices, as suppliers hold a pivotal position in facilitating the accomplishment of organizational sustainability objectives. Companies can adopt various approaches to involve suppliers in sustainable procurement, such as conducting supplier assessments, establishing collaborative partnerships, and implementing supplier development programs. In this article, we will delve into different sustainability approaches and exemplify how renowned organizations have taken the initiative in implementing sustainability practices.

Supplier assessments help companies evaluate suppliers' sustainability performance and identify areas for improvement. For example, Coca-Cola has implemented a Supplier Sustainability Index that assesses suppliers' sustainability performance across six categories, Energy and Climate, Water Stewardship, Human Rights, Packaging and Recycling, Workplace Rights and Labor Practices, and Sustainable Agriculture and Ingredients. Nestle has implemented a Responsible Sourcing Program that engages suppliers on a range of sustainability issues, including human rights, environmental performance, and ethical business practices.

Collaborative partnerships are another way that companies can engage suppliers in sustainable procurement. Companies and suppliers can develop and implement sustainable procurement strategies that benefit both parties by working together. For example, Walmart has partnered with suppliers to achieve its goal of sourcing 100% of its energy from renewable sources. The company has collaborated with suppliers to implement renewable energy projects such as solar and wind farms.
⁠Companies can also develop joint sustainability initiatives that benefit both parties. For example, the Dutch chemical company DSM has partnered with its suppliers to develop a sustainable palm oil supply chain to reduce deforestation and improve smallholder farmers' livelihoods.

Supplier development programs help suppliers improve their sustainability performance by providing training, resources, and support. Many suppliers lack the necessary knowledge and resources to adopt sustainable practices, so companies can offer training and support to help them improve. ⁠For example, the French food group Danone has established a training program for dairy farmers in its supply chain, teaching them how to reduce greenhouse gas emissions and improve animal welfare. Nike too has implemented a Supplier Sustainability Program that provides training and resources to help suppliers improve their environmental and social performance. PepsiCo has implemented a Sustainable Farming Program that works with farmers to promote sustainable agricultural practices. The program provides training and resources to help farmers improve their sustainability performance.

⁠Further, companies can include sustainability criteria in their procurement contracts, requiring suppliers to adhere to specific environmental, social, and governance (ESG) standards. ⁠For instance, Walmart requires its suppliers to report their greenhouse gas emissions and energy use and to make commitments to reduce their environmental impact.

⁠A report by McKinsey highlights the importance of engaging suppliers in sustainable procurement to achieve meaningful impact. The report recommends that companies engage their suppliers through a range of activities, including supplier assessments, collaborative partnerships, and supplier development programs.

⁠Another report by the World Economic Forum emphasizes the importance of supplier engagement in achieving sustainable supply chains. The report highlights the need for companies to work closely with their suppliers to identify sustainability risks and opportunities and to develop strategies to address them.

In conclusion, sustainable procurement practices depend on the active involvement of suppliers. Supplier engagement is pivotal in achieving meaningful impact and establishing sustainable supply chains that prioritize environmental responsibility and social welfare. By embracing these strategies, organizations gain the power to drive substantial positive change in their procurement practices and contribute significantly to building a more sustainable future.

FactWise is a unified E-procurement platform with a fully integrated suite of procurement products, offered at a fraction of the cost of competitors, used by global product manufacturing companies to transform their procurement organization via analytics and automation. FactWise Source-to-Pay empowers procurement organizations with dynamic, holistic supplier performance analytics across key supplier metrics like price, on-time delivery, quality, sustainability metrics, etc., so that buyers have a high degree of decision intelligence, and can improve supplier relationship management via enhanced collaboration. The intelligent supplier selection algorithm helps prioritize preferred and well-performing vendors, while also discovering new suppliers that match your ESG or other ethical requirements and quality standards.

At FactWise, we are committed to building truly distinctive procurement software solutions that delight users and provide a sustainable positive impact on the organizations we serve. We do this by providing transparency and insights to leaders (31% increase in governance), streamlining and automating processes to improve efficiency (20% increase in efficiency), and driving bottom-line impact by unlocking savings potential (25% cost reduction for direct spend).