Governments, buyers, and end-consumers alike are increasingly demanding sustainable products and practices. Supplying organizations therefore need to provide documented, accurate and readily available sustainability data. Being sustainable is no longer a differentiator, but rather a qualifier to even be considered as a reputable B2B supplier. But what exactly is sustainability? And what does it mean to be a sustainable supplier?
What is a sustainable supplier?
The word sustainability means different things to different people. In business, sustainability is often analyzed and discussed in terms of Environmental, Social, and Governance (ESG) factors. These are non-financial performance indicators used to determine a company’s overall ability to last in the longer term. So, what is a sustainable supplier? In the context of a B2B, being sustainable means ensuring that:
- Your company focuses on decreasing its carbon footprint and not negatively impacting the environment in which it operates.
- Your company and any sub-manufacturers or contracted personnel engage in fair labor practices, including the health and safety of workers.
- Operating on sustainable company values with systems in place for accountability
Selecting a sustainable supplier
Having a sustainable supply chain and working only with proven sustainable suppliers is not only increasingly becoming a want from the market, but also a need for the buyers’ own sustainability goals and legal compliance. From a buyer’s perspective, choosing a sustainable supplier to purchase from can be a minefield. Data on supplier sustainability/ESG is often sparse and unreliable. Buyers need an easy, accurate, and reliable way to determine which suppliers meet their sustainability requirements.
How SAP Business Network can help
Suppliers can now publicly share their 3rd party sustainability ratings with buyers on SAP Business Network. The new integration with EcoVadis allows suppliers to display their sustainability ratings on thier supplier profiles on SAP Business Network. Suppliers can be exposed to more buyers and gain new business opportunities when buyers search for trading partners who fit the sustainability requirements of their value chain. If not already certified by EcoVadis, suppliers can find EcoVadis in the SAP Store and self-report their company’s data to get a rating.
Additionally, as buyers are increasingly requesting human rights data from their suppliers, suppliers must complete similar but separate assessments from many of their buyers. Oftentimes, these assessments must be done on a one-to-one basis for each of their customers. Filling out the same data repeatedly is resource-consuming for suppliers and means long waiting periods for buyers, leading to extended procurement cycles and long supplier onboarding times.
Today, with the Supplier self-assessment questionnaire – Human rights feature that will be available to all suppliers on SAP Business Network and integrated with SAP Ariba Supplier Risk solution, suppliers can complete one standard set of human rights questions and share them proactively with any buyer on the network or with buyers who request it from them. With this one-to-many data exchange, both buyers and suppliers can now save valuable time and resources when requesting, completing, and exchanging this information with one another. While preparing for human rights due diligence requests, suppliers can simultaneously build trust among their buyers by making this data highly accessible. Additionally, suppliers can gain new business by buyers choosing to buy from them based on their completed questionnaire. Suppliers must only fill out the form once, and any buyer with whom they have shared it will automatically receive an email and in-app notification any time updates are made to it.
How was the questionnaire formulated? Is it valid?
In order to develop the comprehensive self-assessment questionnaire, the following open standards were used:
- World Benchmarking Alliance
- World Business Council
- UN Guiding Principles on Business and Human Rights
- Reporting Standards such as GRI, UN-SDG, and SASB
- Industry Organizations such as Drive Sustainability
- NAP Questionnaire
While completing the questionnaire does not lead to a certification or guaranteed compliance for suppliers, it helps facilitate the process of sharing human rights due diligence information and build credibility among existing and prospective buyers.
How can these network sustainability features benefit me?
Buyers can now conduct their human rights due diligence quickly for both their existing and prospective suppliers, while reducing procurement and onboarding cycle times. Suppliers can save valuable time and increase their efficiency by completing a single questionnaire once and proactively managing due diligence requests from buyers. Additionally, they have the potential to generate new business by being discovered by new buyers while building trust with their existing and prospective customers.
Learn more about our network sustainability features
Our Supplier self-assessment questionnaire – Human rights feature will be available to all buyers and suppliers on SAP Business Network beginning April 28, 2023.
Supplier profile sustainability ratings will be available to all network suppliers beginning March 17, 2023.