Approach to a sustainable supply chain through supplier collaboration and engagement
- Consulting
- Forests, Land and Agriculture
- #Business and Human Rights
- #Net Zero
- #Sustainable Procurement
08/07/2024
Corporate activities are closely linked to environmental and social issues like climate change and poverty. Sustainable procurement is vital for achieving a sustainable environment, society, and economy. Companies should ensure sustainable procurement and suppliers' responsibilities in the supply chain through procurement and purchase of sustainable materials, products and services from responsible suppliers and attention to impact on environment and society by "Code of Conduct" and "Procurement Guidelines."
目次
Raising awareness of environment & human rights and challenges in achieving “Sustainable Procurement”
Problems involving environmental destruction and forced child labor by suppliers may damage corporate brands and lead to a loss of trust among consumers and investors. Nowadays, buyer companies are also held accountable. In Japan, interests in environmentally- and human rights-conscious procurement have been increased since the 2020 Tokyo Olympics. In this project, Lively assisted a construction materials manufacturer in identifying environmental issues in its business and developing a “sustainable procurement” approach aligned with societal and stakeholder demands in the value chain.
Collaboration and engagement with suppliers are key
Working together with suppliers is crucial for sustainable procurement. Lively made reference to international ESG disclosure frameworks, supply chain audits, and forest certifications and indicated five steps towards sustainable procurement: clarification of requirements, risk assessment, on-site check by audits, corrective actions, and information disclosure. We first analyzed initiatives of the client’s parent company, suppliers, and benchmark companies. Then we compared its current situation with societal and stakeholder expectations. This helped the client prioritize issues and develop specific initiatives for “procurement from responsible suppliers” and “procurement of sustainable goods and services.”
Understanding the significance of sustainable procurement and for formulating policies
Achieving sustainable procurement cannot happen overnight, especially when addressing environmental and human rights issues in supply chains while managing requests from the company and downstream partners, as well as monitoring hundreds of upstream partners. Furthermore, thanks to this project, the client was able to grasp a concrete approach to suppliers through our proposed step-by-step action plan based on the analyses of the current state of the supply chain and issues in procurement activities.
Sources
Hidemi Tomita (2018) Sustainable Procurement in the Era of ESG Investing (Unofficial Translation), Nikkei BP
Message from the Project Member
Sustainable procurement is crucial for aligning with the client's philosophy of "achieving a sustainable society." To reduce environmental and labor risks and enhance credibility, we strengthened cooperation with suppliers using ESG criteria and developed a concrete action plan. This project highlights the importance of understanding sustainable procurement as a guideline for future efforts. Lively offers assistance in formulating and implementing these approaches. If you have any questions, please feel free to contact us.
