According to Gartner’s Future of Supply Chain: Crisis Shapes the Profession report, 77% of companies say that they’re investing in deeper and more collaborative supplier relationships to build resilience. Since COVID-19, we’ve seen that companies want to partner with responsive, responsible suppliers who share their goals—especially relating to ESG. As a supplier, therefore, the best way to remain competitive is to understand your systems and supply chain and link them to corporate sustainability.
For instance, in the Consumer Packaged Goods industry, retailers like Target and Walmart require detailed supplier data to develop sustainability labels. Suppliers that demonstrate superior ESG practices also set themselves up for more favorable contract terms.
Ultimately, we can see that brands identify strategic and primary suppliers based not only on price, but also on the quality of sustainability data. You can stand out to environmentally-conscious buyers by focusing on the following four steps:
1. Know Your Buyer
One crucial way to stand out as a supplier is to do your homework. Who is your buyer and what is important to them? Don’t wait for buyers to explain what matters to their business and how you fit in—be proactive.
For example, procurement, quality, and sustainability divisions at larger companies often sort suppliers into segments. They may evaluate the type of product you sell, its quality, your past performance, and a variety of commercial factors such as volume and spend. But companies with public sustainability goals will also look at ESG metrics when they decide whether and how much to purchase from you. These metrics may include:
- Product and material certifications
- Diversity, equity and inclusion programs
- Responsible sourcing audit scores
- UN SDG-centered sustainability goals and targets
- Special projects aligned to their corporate targets (carbon emissions, social compliance, etc.)
As a result, you’ll want to be proactive about your handle on these metrics. You might start by researching your customers’ product requirements as well as their specific ESG goals so that you can tailor your own data collection accordingly.
Picture this like a good CV: rather than waiting for requests for information, identify overlap and position yourself as a valuable resource. This will also help you respond to data requests more efficiently when they do come in.
2. Be Prepared
At this point, you can expect companies will evaluate you based on the strength of your sustainability data. As a supplier, you likely receive hundreds of quality and compliance questionnaires per year. Following best practices in how you collect, store, reuse, and analyze data will save you time, make you a more reliable choice for buyers, and allow you to focus on bigger goals.
So, here’s how you demonstrate a commitment to quality data:
- Know your products. Understand their compositions, certifications, and testing results.
- Know your supply chain. Track where your products and components originate and map out potential risks.
- Establish regular procedures. Store quality data and perform regular updates.
- Respond promptly. Well-organized data can help you fill out buyer assessments ahead of your competition.
- Identity areas of improvement. Target your weaknesses and fill the gaps!
Note that you may need to be flexible. Many companies ask you to report data via proprietary portals or forms instead of a simple PDF. It may seem cumbersome, but the payoff is usually worth it, and may be the price to play.
Furthermore, try to ensure upfront that you can meet their expectations. Ask how much and how often you’ll need to report data and ensure your systems and internal resources are able to support these efforts. Overall, communicating, tracking, and sending can take at least a couple of hours per month. Cleansing and organizing your historical data can also become a large undertaking, but one potentially well worth your investment.
3. Get Aligned
After you’ve done your research, it’s time to start collaborating with buyers and selling your business and sustainability accomplishments. High-performing suppliers are those who identify opportunities for collaboration and joint projects. In practice, this might look like proactively setting up a collaborative workshop. Rather than go back and forth via email, this allows you to directly share your corporate KPIs, detail what makes you unique, and show how your work fits into their corporate sustainability strategy.
Furthermore, can your R&D teams co-innovate? Can you seek out common goals? After all, when you build trust by working well collaboratively, you’re more likely to reach out to each other in the future—and support each other in the event of a future supply chain crisis.
More and more joint industry commitments have succeeded in recent years as well. For example, 85 brands—including Adidas, Lululemon, and Madewell—and suppliers committed to the Textile Exchange’s 2025 Recycled Polyester (rPET) Challenge. By increasing the global percentage of rPET from 14% to 45%, they hope to be a catalyst for apparel and textile change.
It’s equally important to solicit regular feedback from your buyers. According to A.B. Brown from Supply Chain Dive, the single greatest 2021 technological investment has been in supply chain tools for visibility and mapping. He notes that 66% of companies have invested in these tools, while 25% plan to invest within the next two years.
Ask if your buyer can share your classification or segmentation status. This way, you can target problem areas and improve your position in their network. Finally, share frequent updates on your status back to your buyers. Suppliers that stay on a company’s radar are more likely to be chosen for future projects and featured in annual marketing reports.
4. Drive Behavioral Change
Fundamentally, demonstrating ESG best practices comes down to quality research, communication, and preparation. Brands want to see concrete data. Whether you cut GHG emissions, raise your worker wages, or reduce plastics in your supply chain, you need to track your metrics. It’ll pay off with better contract terms, more marketing opportunities, and an improved ranking in your buyer’s supplier network.
Now more than ever, tracking data has a tangible impact. This means that once you start to champion sustainability, buyers will take note. All of a sudden, you won’t be explaining away subpar metrics. Instead, you’ll attend your next meeting feeling confident about your sustainability metrics in addition to your product performance.
Demonstrating best practices, communication, and collaboration proactively builds relationships and advances ambitious sustainability goals. Imagine sitting across the table from your customers as a peer—and better yet, as a partner.
