Select Page

Maximizing Supplier Participation in Sustainability Reporting

by | Aug 10, 2021 | Blog, Supply Chain Management

Gartner predicts that by 2023, organizations that don’t optimize how they manage supplier data will have faulty information for up to half their suppliers. To prevent bad data from corroding sustainability insights, organizations must streamline supplier data collection. The easier you make it for suppliers to give you data, the more likely that they’ll buy in, start tracking their sustainability KPIs, and provide high-quality answers to the questions you ask.

Right now, supplier survey fatigue slows down operations. There are so many different questionnaires and reporting tools on the market that suppliers are struggling to keep up. By the time they fulfill one customer request, another pops up in its place. As we go forward, this dynamic will only continue: companies will need more and more data from their suppliers to adhere to ESG regulations and create more sustainable supply chains. Making the process of data collection easy and valuable is key.

Here’s how you can improve your supplier sustainability data collection efforts and build a better understanding of what’s going on in your supply chain.

Increase Response Rates

The more suppliers that respond to questionnaires, the more comprehensive view an organization has of its performance. Supplier response is a quantitative measure—and unless you’re getting close to a 100% response rate, you’re making decisions with incomplete data.

Focusing on the supplier experience will help increase overall response rates. Communication and technology are two very effective ways to make the supplier experience run more smoothly. Before you request data, set clear expectations with suppliers so they know exactly what type of data you need from them, what it’s being used for, and when you expect to see it.

On the technology side, instead of taking a DIY approach with hard-to-manage Excel templates and manual emails, consider using a more modern application designed specifically for the task. Many platforms exist solely for the purpose of supplier sustainability data management. Some even have features that allow suppliers to share responses with multiple customers, reuse data, and forward data requests down multi-tier supply chains.

If you’re interested in exploring these tech solutions, check out the Gartner Market Guide for Supplier Sustainability Applications, which gives a great overview of the market and its major players today.

Improve Data Quality

The other side of data quantity is data quality. Companies may have all the data in the world, but if it’s flawed, their decisions could still be faulty. Complete, accurate data sets are the only way you can be sure that you’re making informed decisions. So how do you get higher quality data from suppliers?

Using a single platform for data collection and asking standardized questions are two very important steps. This will help ensure that all your information is centralized and that your data is formatted in a way that’s easily referenceable year over year, for both you and your suppliers.

Additionally, when creating your supplier assessments, be sure to ask questions in terms that suppliers will understand. For example, if you’re working with a small supplier and you ask for specifics on their emissions intensity, they may not be familiar with that terminology.

Using terms that everyone can understand greatly impacts the bottom line of reliable data. If your suppliers don’t understand, you’ll receive low-quality data. To mitigate this issue, ask for more basic data, such as energy outputs, and then calculate the intensity yourself. Or, you can rely on solutions that auto-calculate these metrics. This helps suppliers respond in a more timely fashion, and gives organizations more confidence in the data they collect.

Add Value

Finally, to get high-quality data and increased response from suppliers, you must make the process valuable for them as well. Before sending out surveys, be sure to explain not only how they can provide data but why they should participate.

One way to do this is to be transparent about what decisions you plan to make with the results. Once you receive all the data, you should show your suppliers how they’re performing relative to others in their industry—where they’re doing well, where they can improve, and what steps they can take going forward.

Many companies also introduce supplier incentives such as sustainability performance awards. These often work best when it provides your suppliers with tangible financial or business value, not just kudos and clout. For instance, Walmart partnered with HSBC to allow its suppliers to apply for better financing deals if they made progress on its Sustainability Index. Offering training and program development opportunities for suppliers, especially those who aren’t performing as strongly, is another great option.

At the end of the day, whether its business insights, financing, training, or awards, suppliers should feel like they’re gaining something by participating in these initiatives.

What To Remember

Once you can show your suppliers that they’ll benefit by giving you reliable data, it’s more likely that they’ll participate. The most common issue with supplier participation is that assessments are just too long, confusing, and complex. By pre-populating, standardizing, and communicating early and often, companies can collect more reliable data and build strong supplier relationships over time.

Remember, easy-to-use platforms can make you more effective at collecting data and achieving supply chain sustainability. Find one—and use it!

Share This