Traiter avec les fournisseurs non coopératifs en matière de durabilité. Pouvez-vous trouver un terrain d’entente et parvenir à un compromis ?

Companies need a supplier code of conduct to mitigate risk of third-party suppliers who go against company values or worse, regulations and societial values in which that company operates in. With the supplier code of conduct, all suppliers must sign it in order to continue doing business with you. This might seem like a challenge but the business risk and potential for reputational loss is paramount. Take a lesson from Nike in the 90s who was ousted for having suppliers using child labour as young as 4 and 5 years old.

Dealing with uncooperative suppliers on sustainability requires finding common ground and reaching a compromise. Start by understanding their concerns and constraints. Communicate the long-term benefits of sustainable practices, such as cost savings and improved market reputation. Highlight any regulatory pressures or customer demands for sustainability that could affect their business. Offer incentives or support, like shared cost initiatives or training, to ease their transition. Propose phased implementation to allow gradual adaptation. Focus on building a partnership rather than imposing demands. By addressing their needs and demonstrating mutual benefits, you can work towards a compromise that advances sustainability goals.

As a proponent of sustainable supply chains, here's my 10-cent view. When it comes to handling suppliers who don't cooperate on sustainability, it's important to take a strategic and collaborative approach. Starting by understanding their concerns and the obstacles they face when it comes to sustainability. Emphasize the long-term benefits of cost savings, regulatory compliance, and improved reputation. Provide training or financial incentives to aid the transition. Sustainability can strengthen partnerships and market advantages, so emphasize mutual benefits. Keep communication open, and set incremental goals to align their practices with your sustainability goals. This approach promotes compromise and sustainability progress.

Most of the barriers are around 2 topics: Bandwidth Data gaps Suppliers that have been around awhile know the value sustainability can have for their business and you as their customer. They just don't have the resources most time as you do. Offer to be their "consultant" of sorts.

Finding common ground with uncooperative suppliers on sustainability can be challenging, but it’s possible with the right approach. Start by understanding their concerns and educating them on the benefits of sustainable practices. Their might be some handholding required from time to time. Highlight mutual benefits, offer support, and set realistic goals. Regular communication and flexibility in negotiations can help reach a compromise. Working together, we can achieve our sustainability goals.

Focus on education is not only useful as a negotiation tactic but also essential as a form of let's call it "corporate just transition." In my opinion, it is critical for corporations to invest in the education of their suppliers if they suppliers are small and medium-sized enterprises (SMEs). For example, if a large company needs to comply and measure Scope 3 while works with many smaller suppliers (often found in smaller markets in retail/ agriculture/ hospitality groups), it is actually demonstration of sustainable practice in both Governance and Social pillars to educate and assist its suppliers as they are not subject to mandatory ESG reporting, may lack the knowledge or capacity to meet the required standards.

Education should be combined with a competitive analysis. It will be of important to you as their customer also succeed, i.e. in order to keep doing business with them. A form of education and explanation on why ESG and sustainability measures would need to include (1) an overview of specific legal industry relevant requirements, (2) the requirements for you as a company, (3) requirements for suppliers and (4) commercial effect of non-compliance. Furthermore, beside education, I would definitely recommend looking into the legal requirements of the agreement signed with the supplier and if necessary set a hard deadline to comply or potentially terminate the agreement (if commercially possible - also see Google Renewable Energy Addendum).

Show them how embracing sustainability will make them more attractive to their other customers. It's just like sales, make it all about them and creating value or reducing risk. Don't try to boil the ocean either, look at the slam dunks (policies, baseline KPIs, etc.)

In practice, aligning sustainability goals with suppliers' capabilities involves highlighting long-term benefits like cost savings and improved brand reputation. Creating a collaborative environment through joint workshops and regular check-ins fosters a sense of ownership and commitment. Offering resources, such as access to sustainability experts and financial incentives, eases the transition. Demonstrating partnership and maintaining open communication builds trust, making even reluctant suppliers more open to gradual sustainable changes.

In any agreement to be signed with suppliers a company should include specific language related to ESG and sustainability and a possible addendum. A phased plan in negotiations should also be considered in the light of upcoming regulation and legal requirements. It furthermore, will be important to include specific milestones and incentives for all parties in the supply chain.

As you look at the terms in the MSAs remember the lift on their side and what you can do to lighten it. It might take you a few years before the fully embrace it so 'take away their no's" and make the decision as easy as possible. When I engage suppliers for KPIs an easy ask is give to have them give you the data in its existing conditions. Don't make them jump through hoops.

Using your influence effectively involves demonstrating the mutual benefits of sustainable practices. Emphasise potential cost savings, enhanced brand reputation, and future regulatory compliance. Foster a partnership mindset through joint initiatives and regular discussions. Providing resources and support makes adopting sustainable practices more feasible and appealing to suppliers, increasing their receptiveness to change!

Studies show that 70% of suppliers are open to sustainability initiatives if requested by key clients. Use this influence judiciously to encourage change, emphasizing the long-term benefits of sustainability for both parties. Companies that collaborate with their suppliers on sustainability report a 30% improvement in efficiency and a 20% reduction in costs. Remember that collaboration and partnership are more effective than ultimatums, fostering a cooperative approach to sustainability.

Your ability to influence suppliers on sustainability is not just about the individual relationship between you and the supplier. For example, you may work in an industry where you and your competitors draw upon the same suppliers. In such a situation, it would make sense to consider forming an initiative where you work together to encourage your suppliers to engage in more sustainable practices. Or you may be a large business where your supply chain is so vast and fragmented that it is very hard to engage individual suppliers. In such a situation, it would make sense to consider an initiative that seeks to move the whole market rather than specific suppliers.

Pause and get feedback. Ask them how painful or what value they've gotten after a few iterations. Be open to amending the how and when. Help them to feel included. Sustainability is a subject that removes barriers, it removes pride, it's about doing great for everyone. Who doesn't like that.