Demystifying ESG Engagement: A Starting Point for Engaging Suppliers

While our clients acknowledge that engaging suppliers on sustainability risk is important, knowing how or where to start can prove challenging for busy procurement specialists. At SD Strategies, we pride ourselves on our ability to demystify supplier engagement, from deciphering ESG jargon to ensuring the right questions are being asked (and answered). 

Check out our top three tips for engaging suppliers on environmental and social issues:

1.     Identify their ‘why’: Just because an issue is material to you, doesn’t mean it will be a priority for your suppliers. Take for example modern slavery. As a reporting entity you are required to assess and address the risk of modern slavery in your supply chain. Don’t outsource that responsibility to your supplier, particularly if they are not a reporting entity themselves. Rather, engage, educate and train your suppliers. Help them understand the issue, the relevance to their business or industry sector, the expanding global legislative requirements, as well as stakeholder and investor expectations.

2.     Provide advice and support: Small to medium enterprises supplying goods and services to you may not have the knowledge, skills and resources to effectively assess modern slavery risk across their operations and supply chain. Where possible, support them with the provision of training, supplier checklists and risk assessment processes. If appropriate, provide modern slavery or human rights policy templates and guide suppliers on policy implementation, review and effectiveness verification. Your suppliers will appreciate the support and will be more inclined to work collaboratively to identify your collective risk.

3.     Change your language: We regularly undertake supplier desk-top assessments and provide detailed reports to our clients on the systems and processes suppliers have in place to manage modern slavery and broader human rights risks. While the reports are risk-based and suppliers are assessed according to defined effectiveness criteria and risk-mitigation controls, the language used is important. A subtle shift from words like ‘risk’, ‘findings’ and ‘corrective actions’ to ‘gaps’, ‘observations’ and ‘opportunities’ will ensure suppliers see the process as an important value add.

Want to learn more about how we can help build your supplier engagement strategy?

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