Future of Sourcing - Sustainable Sourcing http://futureofsourcing.com/topic/sustainable-sourcing en The Power of Impact Sourcing and Why it Matters http://futureofsourcing.com/the-power-of-impact-sourcing-and-why-it-matters <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/The-Power-of-Impact-Sourcing-and-Why-it-Matters.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/The-Power-of-Impact-Sourcing-and-Why-it-Matters.jpg" title="Impact sourcing is philanthropic by nature, but you shouldn’t ignore the economic and business value it can provide." class="colorbox" rel="gallery-node-2211-6oeySZQaoJg"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/The-Power-of-Impact-Sourcing-and-Why-it-Matters.jpg?itok=92emApwY" width="624" height="325" alt="Impact sourcing is philanthropic by nature, but you shouldn’t ignore the economic and business value it can provide." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Impact sourcing is philanthropic by nature, but you shouldn&rsquo;t ignore the economic and business value it can provide says Frédérique Froment-Kelleghan, Senior Manager, Transforming Talent, <a href="https://www.welocalize.com/" target="_blank">Welocalize, Inc.</a> She shares four key benefits of impact sourcing.</em></p> </div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The key to success for any business is the quality and consistency of its workforce. Business leaders are always on the lookout for high-quality talent, and if this talent can be acquired with low attrition rate, then you&rsquo;re onto a winning formula. This is where impact sourcing can come into play.</p> <p>Impact sourcing, a business buzzword, is part of Business Process Outsourcing (BPO). Outsourcing used to be shrouded with negative connotations. Images that sprung to mind were employees on the other side of the world working in poor conditions for less than minimum wage or businesses that cared more about money than employee welfare.</p> <p>However, there has been a huge shift in the practice of outsourcing. Businesses can flop if they do not actively show the wellbeing of their employees is a top priority.</p> <p>Impact sourcing has grown in popularity since the Covid-19 outbreak. It is also a way for organizations to make a positive social impact.&nbsp;</p> <h1>What is Impact Sourcing?</h1> <p><a href="https://gisc.bsr.org/about/what-is-impact-sourcing" target="_blank">The Global Impact Sourcing Coalition</a> defines impact sourcing as a practice where a business will prioritize, hire, and promote career development for people from social or economically disadvantaged backgrounds. Organizations strategically employ people who are from a disadvantaged background to socio-economically empower them so that they are able to earn a decent living. The model focuses on impacting the entire community by changing the life trajectory of the individuals for the better.</p> <p>The type of employees hired through impact sourcing will be dependent on the locale they are based in, but in general, impact sourcing tends to target women, unemployed youth, or people who live in rural or poverty-stricken areas.</p> <p>These employees are usually equipped with the skills, talent or qualifications needed for entry-level roles, but are unable to find work due to certain societal or economic hurdles and/or for lack of specialization.</p> <p>Impact sourcing is really a win-win situation for employers and employees. The employers can hire a new, talented workforce, while the employees&rsquo; quality of life will improve as will their societies.</p> <p>With impact sourcing, employees will likely earn more than they would in their present job, and this extra income can impact their families and livelihood.</p> <h2>What are the Benefits of Impact Sourcing?</h2> <p>Impact sourcing is philanthropic by nature, but don&rsquo;t ignore the economic and business value it can provide. Here are four key benefits impact sourcing can offer your brand.</p> <h2>1. Diverse Workforce</h2> <p>Unlike traditional outsourcing providers, who usually rely on the same regurgitated resources, impact sourcing allows you to <a href="https://www.rockefellerfoundation.org/blog/why-impact-sourcing-good-businesses/#:~:text=Our%20research%20shows%20that%20impact,many%20companies%20using%20impact%20sourcing." target="_blank">uncover fresh, untapped talent</a>. This new pool of talent will likely possess a wide range of skills and a desire to learn and develop their careers.</p> <p>For the majority of these new workers, this will be their first professional job with a decent wage. As a result, these employees tend to be more motivated and committed to your company.</p> <p>By investing in employees with great potential, your business will be in a position to reap the rewards for years to come.</p> <h2>2. High-Quality Work and Low Attrition</h2> <p>This follows on nicely from the previous benefit. Put yourself in the position of an impact worker. You&rsquo;ve struggled to find a stable job that offers a decent wage and now a company has offered you a position that will satisfy all your basic financial needs coupled by an extensive professional training to grow your skills in specific areas.</p> <p>How would you feel? For most of us, we would feel a sense of relief, gratitude for our employer and would be determined to exceed our employer&rsquo;s expectations.</p> <p>Impact workers tend to be incredibly grateful for these opportunities, and because of this, they are usually loyal to their employers. Attrition rates tend to be very low among impact workers. In fact, impact workers have <a href="https://www.rockefellerfoundation.org/blog/why-impact-sourcing-good-businesses/" target="_blank">15% to 40% lower attrition</a> than other outsourcing employees.</p> <p>This lower attrition rate means you will save a considerable amount of money you would spend on recruitment and new hire training. What you will have is an experienced and dedicated workforce that will help you achieve your business goals. What could be better?</p> <p><em>&ldquo;Purpose is at the heart of this. It&rsquo;s the core of what we do at Digital Divide Data. It&rsquo;s really about making a difference and creating the stepping stones to move forward both personally and professionally. Talent doesn&rsquo;t have boundaries, so we shouldn&rsquo;t either.&rdquo; - </em>Jeremy Hockenstein, CEO, Digital Divide Data</p> <h2>3. Long-Term Savings</h2> <p>With low attrition rates come increased cost savings. Businesses that employ impact workers often avoid the costs that come with re-hires. In the long run, impact sourcing is a highly profitable business venture.</p> <p>Impact Sourcing also offers higher upfront cost savings. Take India for example, Impact Sourcing has yielded a colossal <a href="https://www.rockefellerfoundation.org/blog/why-impact-sourcing-good-businesses/#:~:text=In%20India%2C%20impact%20sourcing%20offers,BPO%20in%20an%20outsourced%20model.&amp;text=In%20India%2C%20the%20savings%20are,1%20locations%20for%20traditional%20sourcing." target="_blank">35% to 40% reduction</a> in expenses compared to other traditional BPO models.</p> <p>Today, <a href="https://www.smallbizgenius.net/by-the-numbers/outsourcing-statistics/" target="_blank">59% of businesses</a> use outsourcing to reduce their expenses, and the Impact Sourcing blueprint can help you save without damaging your company&rsquo;s overall productivity and efficiency.</p> <h2>4. Social Impact</h2> <p>For years, supply chain logistics has revolved around maximizing sourcing and distribution at the lowest cost. And yes, while this business approach does work if you want to gain a high profit in a short timeframe, it may not be the most profitable solution in the long run.</p> <p>Impact sourcing is at its core an egalitarian approach. It puts the priority on wealth distribution over financial ideologies. Today, business leaders feel impact sourcing is the better solution for long-term sustainability and business growth.</p> <p>It&rsquo;s a harsh reality, but primary suppliers are normally the lowest paid and underrepresented links throughout the entire supply chain.</p> <p>Impact sourcing will not be able to dismantle the socio-economic system that oppresses certain producers from certain countries in poverty. What it can do is alleviate poverty in communities across the globe.</p> <p>As time goes on, impact sourcing could potentially take many economic pressures primary suppliers face off their hands, and that will galvanize us towards a new sustainable future.</p> <h2>In Conclusion</h2> <p>The future of business, and how businesses run, is always evolving. And today, showcasing yourself as a reputable company that cares about sustainability as well as the welfare of your employees has never been more important.</p> <p>Right now, the potential that impact sourcing can have not only to your annual revenue, but to the inclusivity and sustainability of global workforces is impossible to ignore. So, now is the time to adopt this impact sourcing into your current business model.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/impact-sourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Impact Sourcing</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/environmental-and-social-governance-esg-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Environmental and social governance (ESG)</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="The Power of Impact Sourcing and Why it Matters - Future of Sourcing" addthis:url="http://futureofsourcing.com/the-power-of-impact-sourcing-and-why-it-matters"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Wed, 03 Aug 2022 02:00:00 +0000 Frédérique Froment-Kelleghan 2211 at http://futureofsourcing.com http://futureofsourcing.com/the-power-of-impact-sourcing-and-why-it-matters#comments How Procurement Teams Can Diversify Suppliers And Manage Risk http://futureofsourcing.com/how-procurement-teams-can-diversify-suppliers-and-manage-risk <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/Diversify-Suppliers-And-Manage-Risk.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/Diversify-Suppliers-And-Manage-Risk.jpg" title="Procurement officers have an important role in helping minority-owned suppliers overcome barriers to accessing contracts through smart risk management policies." class="colorbox" rel="gallery-node-2209-6oeySZQaoJg"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Diversify-Suppliers-And-Manage-Risk.jpg?itok=ODIev78W" width="624" height="325" alt="Procurement officers have an important role in helping minority-owned suppliers overcome barriers to accessing contracts through smart risk management policies." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Procurement officers have an important role in helping minority-owned suppliers overcome barriers to accessing contracts through smart risk management policies says Lara Hodgson, CEO and Co-founder of <a href="https://nowcorp.com/" target="_blank">Now</a>. She shares five tips to help procurement teams meet DE&amp;I supplier goals.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/cash-flow-velocity-redefining-supply-chain-financing">Cash Flow Velocity: Redefining Supply Chain Financing</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>Over the past few years, large enterprises have made incremental progress toward a more diverse supplier ecosystem, but we&rsquo;re still not there. A recent <a href="https://fortune.com/2022/01/25/your-corporate-supplier-diversity-efforts-are-not-going-as-well-as-you-think/" target="_blank">survey of 100 large global companies</a> by The Hackett Group found these companies intend to increase spending on diverse suppliers by over 50% during the next three years. While these commitments are a start, DE&amp;I initiatives are empty without a plan. But, with the proper framework and tools, procurement teams can start diversifying their supplier ecosystems and experiencing the inherent benefits of working with small business suppliers.</p> <h1>Supplier Reliability and Diversity Aren&rsquo;t Tradeoffs</h1> <p>A procurement team tasked with diversifying its company&rsquo;s supplier network must perform a careful balancing act. First and foremost, they must ensure that the company has access to the right goods and services when it needs them. For larger companies, this means finding suppliers with the resources to scale their business, which tilts the balance in favor of larger suppliers. Just as &ldquo;no one ever got fired for buying from IBM,&rdquo; procurement teams naturally seek to reduce risk by buying from larger, more established suppliers rather than smaller alternatives that can provide a comparable product.</p> <p>Yet this tendency to seek out large suppliers to manage risk often conflicts with mandates to diversify a company&rsquo;s supplier ecosystem. While there are large suppliers run by women and people of color, the <a href="https://clutch.co/business-services/resources/supplier-diversity-small-business-statistics" target="_blank">vast majority of underrepresented suppliers</a> are small or medium-sized businesses. Procurement teams tend to steer away from working with smaller underrepresented suppliers, as it could mean a higher risk that the supplier won&rsquo;t be able to deliver. As a result, they stick with the safe option, and the promised supplier diversity fails to materialize.</p> <p>I saw this happen directly with my first company, Nourish Inc. We produced spill-proof bottles for children and toddlers, and during the early years, we had no problem meeting demand from smaller retailers. But when we had the opportunity to supply our product to a major food distributor, we couldn&rsquo;t pay for the cost of scaling because our cash was stuck in unpaid customer invoices. We were a completely free, no-interest bank to our customers. We had no other option but to turn down the major contract that could have taken our company to the next level.</p> <p>This experience taught me a valuable lesson: Most small suppliers don&rsquo;t go out of business; they <em>grow</em> out of business. The problem is that small businesses typically lack the capital and resources they need to scale, which creates a paradoxical situation where a small business becomes a victim of its success. This phenomenon hits minority-owned suppliers particularly hard and undermines sourcing diversification efforts. Fortunately, there are several steps procurement teams can take to support these businesses while diversifying their supplier network and minimizing risk.</p> <h2>How Procurement Teams Can Meet DE&amp;I Supplier Goals</h2> <h3>1. Be Honest About Payment Time</h3> <p>While it is common for many suppliers to submit net-30 invoices to their customers, the reality is that procurement teams rarely meet this timeline. Procurement officers should work with their accounts payable team to reduce the time to pay rather than paying net-whenever they want.</p> <p>Paying suppliers faster will help them grow their business while simultaneously reducing the risk of non-delivery. However, finance teams are incentivized to hold onto company cash as long as possible and that means delaying payments. If payments cannot be accelerated, be honest with suppliers about the likely time to wait for payments to arrive and educate them about solutions they can use to get paid faster.</p> <h3>2. Clarify Supplier Contract Requirements</h3> <p>From types of insurance to certifications and delivery timelines, most large enterprises have very rigorous requirements for suppliers who want to do business with them. These requirements are often buried deep in the company&rsquo;s website &ndash; if they&rsquo;re online at all &ndash; which makes it difficult for suppliers to vet themselves before submitting a bid. By making supplier requirements more accessible, procurement teams limit the risk of contracting with an unprepared supplier while ensuring potential suppliers have all the necessary information to submit a strong bid.</p> <h3>3. Make the Sourcing Decision-Making Process Transparent</h3> <p>It is often unclear to SMBs how procurement decisions are made in large enterprises. To ease the process for suppliers, buyers and procurement organizations should increase visibility to the decision-making process, lifting the curtain on the sourcing process. Efforts that small and diverse suppliers currently spend ferreting out the right person to talk to can instead be spent preparing a contract bid, completing the preparation steps to qualify as a supplier or searching for other customers that are a better fit for their business.</p> <h3>4. Use Curated Supplier Networks</h3> <p>A significant challenge for procurement teams is finding a diverse supplier for their business that fits its parameters and that can deliver at the required scale. While supplier databases exist, most procurement teams do not have the bandwidth to perform due diligence on thousands of potential diverse suppliers.</p> <p>Working with both diverse suppliers and with enterprise supplier diversity teams, my team saw the profound need for a network that creates intelligent connections in real time between procurement teams and diverse suppliers with the readiness to deliver at an enterprise&rsquo;s specified scale and that develops the diverse suppliers&rsquo; readiness.</p> <h3>5. Create a Supplier Apprentice Program</h3> <p>Suppose a procurement team finds a supplier that they like but that isn&rsquo;t quite ready to meet the demands of their organization. In that case, they can still give them a boost while diversifying their supplier network by connecting them with some of their other suppliers. This creates an opportunity for the small supplier to become a subcontractor for a larger supplier to the enterprise.</p> <p>Through this subcontractor role, the smaller supplier can grow their business while simultaneously getting exposure to the requirements of the larger enterprise. This has the function of a &ldquo;supplier apprentice program&rdquo; that will help smaller suppliers prepare to become larger suppliers to a business in the future.</p> <h2>The Bottom Line</h2> <p>Large enterprises are sincere in their desire to help level the playing field for small and underrepresented businesses. While many offer a variety of programs, including grants, technical assistance and mentoring, nothing levels the playing field in a sustainable way as buying from them.</p> <p>Of course, not every solution will work for every business. The strategies chosen by a procurement team will depend on their unique situation, but both procurement teams and suppliers will benefit by leveraging these tips. When procurement teams commit to diversifying their suppliers and meeting DE&amp;I goals, there is a positive ripple effect: promises are fulfilled, requirements are met, diverse perspectives and products are introduced, small businesses prosper, the public approves and customers are happy.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/supplier-diversity" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Diversity</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/diversity-and-inclusion" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Diversity and Inclusion</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/environmental-and-social-governance-esg-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Environmental and social governance (ESG)</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="How Procurement Teams Can Diversify Suppliers And Manage Risk - Future of Sourcing" addthis:url="http://futureofsourcing.com/how-procurement-teams-can-diversify-suppliers-and-manage-risk"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Fri, 29 Jul 2022 02:00:00 +0000 Laura Hodgson 2209 at http://futureofsourcing.com http://futureofsourcing.com/how-procurement-teams-can-diversify-suppliers-and-manage-risk#comments Four Resolutions for Supply Chain ESG Management http://futureofsourcing.com/four-resolutions-for-supply-chain-esg-management <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/Four%20Resolutions%20for%20Supply-Chain%20ESG%20Management.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/Four%20Resolutions%20for%20Supply-Chain%20ESG%20Management.jpg" title="In order to improve ESG performance, organizations must be more open about reporting ESG risks." class="colorbox" rel="gallery-node-2166-6oeySZQaoJg"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Four%20Resolutions%20for%20Supply-Chain%20ESG%20Management.jpg?itok=UbcyD2kM" width="624" height="325" alt="In order to improve ESG performance, organizations must be more open about reporting ESG risks." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p>In order to improve ESG performance, organizations must be more open about reporting ESG risks, disclose ESG metrics in line with industry peers, find a way to track hard-to-find metrics like supplier diversity, and tap technology to improve ESG governance and risk management says Riskonnect CEO&nbsp;Jim Wetekamp. He shares four&nbsp;ESG supply chain considerations for every risk and sourcing leader who wants to proactively improve ESG performance.</p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/three-tips-for-dealing-with-pandemic-driven-risk">Three Tips for Dealing with Pandemic-Driven Risk</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The pressure is on to strengthen environmental, social and governance (ESG) performance. ESG factors influence a multitude of critical decisions &ndash; from where <a href="https://www2.deloitte.com/global/en/insights/topics/strategy/trust-in-corporate-climate-change-commitments.html" target="_blank">people invest</a> to where they work. Indeed, 42% of consumers say they will only buy from <a href="https://www.ey.com/en_us/consumer-products-retail/us-future-consumer-index-7-how-to-satisfy-the-sustainable-consumer" target="_blank">brands that align with their values</a>. &nbsp;</p> <p>Maybe you have taken steps to integrate ESG into operations, but what&rsquo;s next? Given that two-thirds of the average company&rsquo;s ESG footprint <a href="https://www.mckinsey.com/business-functions/operations/our-insights/buying-into-a-more-sustainable-value-chain" target="_blank">lies with its suppliers</a> and nearly 90% of greenhouse-gas emissions <a href="https://www.mckinsey.com/business-functions/operations/our-insights/the-ceo-architect-of-the-new-operations-agenda" target="_blank">come from a company&rsquo;s supply chain</a>, the answer is simple: your third parties. Even small, incremental improvements on environmental and social factors within the supply chain can significantly improve your overall ESG performance.</p> <p>Here are four ESG supply chain considerations for every risk and sourcing leader who wants to proactively improve ESG performance.</p> <h1>1. Be More Open About Reporting ESG Risks</h1> <p>Everyone is <a href="https://www2.deloitte.com/global/en/insights/topics/strategy/trust-in-corporate-climate-change-commitments.html" target="_blank">leery of &ldquo;greenwashing</a>.&rdquo; Customers and stakeholders want to know that the companies they work for and do business with are being authentic in their commitments &ndash; and transparency is critical to delivering on expectations. &nbsp;</p> <p>While most ESG reporting today is voluntary, regulations are imminent. But don&rsquo;t wait for specific requirements to shake out. Be proactive and start reporting on the ESG metrics most important to your organization. Embracing transparency sends a signal to your stakeholders that you place a priority on being a good corporate citizen, have a plan to address any issues and are dedicated to improvement. Starting early will also give you a competitive edge once regulations inevitably roll out.</p> <h2>2. Disclose ESG Metrics in Line With Industry Peers</h2> <p>ESG performance is a major force in the investment world &ndash; specifically the access to and cost of capital. Today&rsquo;s investors are demanding credible ESG data to evaluate their options. Consider providing metrics similar to what your peers are reporting to help investors compare performance and make informed investment decisions.</p> <h2>3. Find a Way to Track Hard-to-Find Metrics Like Supplier Diversity</h2> <p>Diversity, equity and inclusion (DE&amp;I) is a key part of the social element of ESG. While corporate America has increased its awareness of workforce diversity, comparable data from global suppliers can be hard to come by.</p> <p>Differing local reporting requirements and definitions of what constitutes &ldquo;diversity&rdquo; may mean the data you need is simply not there. In that case, you will have to work with your suppliers to begin collecting the type of DE&amp;I data that you need in the form you require.</p> <h2>4. Tap Technology to Improve ESG Governance and Risk Management</h2> <p>Organizations serious about improving supply chain ESG will invest in technology to streamline and standardize the complex process of ESG data collection and analysis. The data you need could be scattered across myriad departments and locations. Gathering that data, staying on top of requirements, keeping track of policies and ensuring your supply chain partners are adhering to your standards is virtually impossible with decentralized systems like spreadsheets.</p> <p>Integrated software is instrumental in bringing ESG risk insights from across the extended enterprise into one place. The right platform can automatically pull relevant data you already collect from wherever it currently resides inside or outside your organization. Any missing information can be seamlessly added via supplier portals, third-party data feeds and more.</p> <p>Having real-time information in one place enables you to understand the full scope of your exposure and proactively manage ESG metrics in a way that will positively impact your operations, brand and stakeholders.</p> <h2>Start Early and Invest Big</h2> <p>The focus and scrutiny on ESG reporting will only intensify. As ESG becomes more ingrained in internal operations, executives will increasingly expand their focus to include supply chain partners. Start now to define the ESG metrics most meaningful to your organization and your industry. You will be ready for any future regulatory requirements &ndash; and will be well on your way toward earning the trust of your stakeholders.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/riskonnect" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Riskonnect</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/environmental-and-social-governance-esg-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Environmental and social governance (ESG)</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/supplier-diversity" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Diversity</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supplier-relationship-management-srm" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Relationship Management (SRM)</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Four Resolutions for Supply Chain ESG Management - Future of Sourcing" addthis:url="http://futureofsourcing.com/four-resolutions-for-supply-chain-esg-management"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Wed, 29 Jun 2022 02:00:00 +0000 Jim Wetekamp 2166 at http://futureofsourcing.com http://futureofsourcing.com/four-resolutions-for-supply-chain-esg-management#comments Leading From the Top: The Positive Impact of Diversity in the Boardroom http://futureofsourcing.com/leading-from-the-top-the-positive-impact-of-diversity-in-the-boardroom <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/The-Positive-Impact-of-Diversity-in-the-Boardroom.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/The-Positive-Impact-of-Diversity-in-the-Boardroom.jpg" title="Learn about the importance of boardroom diversity, and how this can be proactively achieved to drive equality. " class="colorbox" rel="gallery-node-2189-6oeySZQaoJg"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/The-Positive-Impact-of-Diversity-in-the-Boardroom.jpg?itok=whERl_Ak" width="624" height="325" alt="Learn about the importance of boardroom diversity, and how this can be proactively achieved to drive equality. " title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Despite regulations in multiple countries forcing board rooms to have a minimum number of female board members, progress is slow, and it&#39;s even slower in executive board positions like CEO and CFO says</em><em>&nbsp;Candice Eaton Gaul, Global Diversity and Inclusion Leader at RSM International</em><em>. She dives into the importance of boardroom diversity, and how this can be proactively achieved to drive equality.&nbsp;</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/7-actions-procurement-leaders-can-take-to-improve-diversity-and-inclusion">7 Actions Procurement Leaders Can Take to Improve Diversity and Inclusion</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>Social justice movements have been powerful catalysts for change in recent years. As these movements have gained in momentum, they have not only raised awareness of inequality and discrimination, but also set an expectation for change and transparency with the right to question injustice and seek remedy. As a result, diversity in governance and leadership is taking center stage in corporate mission statements and employee value propositions.</p> <p>Despite good intention, transformation is slow, and in many instances, boardrooms still do not reflect the employees they lead or the customers they serve. This creates the opportunity to explore why more drastic measures may be necessary for corporate entities to make progress in gender equality so they can reap the business benefits and remain relevant and sustainable.</p> <h1>Change Must Come From the Top</h1> <p>Taking active steps to increase diversity in board participants and top management fuels creativity and leads to better decision-making. Having a broader range of voices and alternative opinions at the table means business leaders are better equipped to assess risks, attend to complex problems, overcome challenges and help their organizations thrive.</p> <p>There is evidence, too, that greater board diversity delivers benefits that go beyond conventional business performance; it also helps maximise the wider social good that businesses can generate. Recent <a href="https://www.reuters.com/business/sustainable-business/boardrooms-with-more-women-deliver-more-climate-says-arabesque-2022-03-22/" target="_blank">research</a> showed, for example, that companies with more women on their boards were more likely to be on track to meet global climate goals. With environmental, social and governance (ESG) considerations on the rise, it is clear that <a href="https://futureofsourcing.com/rethinking-supplier-risk-in-the-era-of-diversity-and-inclusion" target="_blank">increasing diversity</a> is becoming a necessity for sound corporate governance and risk management.</p> <p>Boards should be acting now to measure the composition of their company&rsquo;s stakeholders &ndash; from clients and customers to investors and employees &ndash; and ask themselves honestly if their breadth is truly represented. This measurement can be complex, especially for larger businesses, because it is dependent on a host of regional and societal factors. It must be done in a way that is meaningful for each individual business and its circumstances.</p> <p>Once a measurable benchmark for improvement has been created, commitment from senior leadership is required to give direction and take action forward, as part of a broader organizational strategy. Most importantly, this should be reflected in daily decision-making.</p> <p>One way of ensuring organizations reflect the broader society in which they operate is to make changes to recruitment. The rise in remote and hybrid working, the reduced significance of geographic location, along with technology-evolving recruitment processes has created an opportunity for businesses to <a href="https://futureofsourcing.com/looking-for-a-career-in-sourcing-and-procurement-heres-how-to-get-started">bring in a range of diverse talent</a>. In addition, this prompts them to question what job functions are actually required to achieve and the role they play in delivering the broader organizational strategies.</p> <p>Increased diversity can also come from within. Boards are able to audit the diversity of existing talent within their organizations and establish where there is untapped creativity, innovative thinking, and different mindsets or backgrounds that can be drawn upon. Actively searching out undercapitalized talent from within can provide interesting insight and assist with formulating business and governance decisions from a different perspective.</p> <h2>How to Eliminate the Drivers of Inequality</h2> <p>Finally, there is an opportunity to do better for ourselves and each other by considering the root causes of inequality, as well as thinking about how its grip on our societies can be loosened.</p> <p>As a South African, I am a firm believer that Nelson Mandela was correct: education is the most powerful tool we have to change the world. Education, training and development in schools and in businesses is critical for creating future leaders, generating opportunities for them and widening the talent pool ever further. Of course, this takes time, but businesses can play their part now by sponsoring students, offering bursaries and creating training resources for existing employees. Those which do so will reap the long-term benefits.</p> <p>In summation, real action to drive equality requires urgent attention. Thinking strategically about board diversity will better equip businesses to improve their corporate cultures, boost business performance and respond to global challenges such as climate change. And there are immediate changes that business leaders can make to their boards that will ultimately drive a more inclusive mindset throughout their organization and into the wider world.</p> <p>There is a moral imperative to act. After all, if corporates are struggling to make change toward equality and representation, how can we expect other parts of society to do so?</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/diversity-and-inclusion" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Diversity and Inclusion</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/diversity-sourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Diversity Sourcing</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Leading From the Top: The Positive Impact of Diversity in the Boardroom - Future of Sourcing" addthis:url="http://futureofsourcing.com/leading-from-the-top-the-positive-impact-of-diversity-in-the-boardroom"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Wed, 15 Jun 2022 02:00:00 +0000 Candace Eaton Gaul 2189 at http://futureofsourcing.com http://futureofsourcing.com/leading-from-the-top-the-positive-impact-of-diversity-in-the-boardroom#comments How Tech Companies Can Support the Green Economy http://futureofsourcing.com/how-tech-companies-can-support-the-green-economy <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/How-Tech-Companies-Can-Support-the-Green-Economy.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/How-Tech-Companies-Can-Support-the-Green-Economy.jpg" title="Environmental concerns are rapidly becoming business concerns and many clients are looking for sustainable solutions." class="colorbox" rel="gallery-node-2177-6oeySZQaoJg"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/How-Tech-Companies-Can-Support-the-Green-Economy.jpg?itok=J-5sY39T" width="624" height="325" alt="Environmental concerns are rapidly becoming business concerns and many clients are looking for sustainable solutions." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Environmental concerns are rapidly becoming business concerns and many clients are looking for sustainable solutions says Nick Stapleton, Managing Director at ETB Technologies. With the U.K. government (and other governments worldwide) focused on tackling climate change and becoming carbon neutral, businesses need to balance finding suppliers that have green credentials with maintaining profit margins. This article looks at how businesses can support the green economy while still making good business decisions, and how governments can incentivize businesses in this endeavor.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/addressing-carbon-emissions-in-the-supply-chain-through-a-circular-economy">Addressing Carbon Emissions in the Supply Chain Through a Circular Economy</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>In October 2021, the U.K. government published its &ldquo;Build Back Greener&rdquo; <a href="https://www.gov.uk/government/publications/net-zero-strategy" target="_blank">strategy</a> with the goal of tackling climate change by decarbonizing all sectors of the economy and meeting its net zero target by 2050.</p> <p>As part of its strategy, the government sought to encourage individuals and organizations to recycle, reuse, or refurbish to reduce the amount of waste generated and sent to landfills &ndash; a key tenet in creating a circular economy. Currently landfills have a significant amount of e-waste &ndash; computers, tablets and other electronic equipment &ndash; that could have been either recycled or made good as new with a little work.</p> <h1>How IT and Technology E-Waste Impacts the Environment</h1> <p>In addition to e-waste in landfills, IT equipment produces a significant amount of waste and emissions during production. Much of the IT equipment we use is built with rare materials &ndash; the extraction of which is fueling climate change and creating pollution. As a result, the IT sector has historically been a negative contributor to the environment. But we can change this.</p> <p>On the surface it might seem that the simplest solution to improving IT&rsquo;s impact on the environment is to encourage people to recycle or reuse their equipment to reduce waste. From an IT perspective, however, recycling is an energy intensive process, and reusing equipment can mean sacrificing quality, speed, and reliability.</p> <p>We must, therefore, look to prioritize the refurbished market to support the green economy. This could have a massive influence on our industry&rsquo;s impact on the environment. In fact, one <a href="https://www.edie.net/news/5/Report--Circular-economy-could-deliver-80--of-UK-s-next-carbon-budget/" target="_blank">report</a> found the circular economy could deliver 80% of the emissions reductions the U.K. needs to meet its goals for 2028-2032. Aiding this should be our goal.</p> <h2>Business Reasons to Support Circular</h2> <p>While the environmental benefits could be huge, there are other reasons for businesses to choose refurbished hardware. For example, due to world-wide supply chain issues, some enterprise manufacturers are quoting lead times of over 100 days to fulfill orders, leading to huge delays for businesses that depend on technology for their day-to-day operations. Refurbished equipment vendors, on the other hand, have items readily available, in some cases being delivered within 24 hours of placing the order.</p> <p>Businesses can also get more for their money by choosing refurbished equipment: a business planning to buy a new server may be able to get a refurbished one with the same specs for half the price &ndash; or one with more capacity for the same price.</p> <h2>Refurbished and the End User</h2> <p>There is little downside for the end user in using refurbished equipment; over the past two decades, the industry has matured and there are far higher professional standards than when it was in its relative infancy at the turn of the millennium, including warranties as good as buying new. In many cases, refurbished products are comparable to new ones in terms of their performance, too.</p> <p>The challenge lies in changing perceptions among businesses, to encourage them to think of refurbished first when choosing new or upgrading IT equipment.</p> <p>The move to remote working coupled with a global shortage of semi-conductors and supply chain challenges has undoubtedly made the circular economy more attractive to businesses looking to invest and stay ahead during the difficulties of the past few years. But offices throughout the UK are reopening. Delays across the supply chain are ending. And as an industry, we can&rsquo;t rely on these alone to drive forward the green economy.</p> <h2>The Government&rsquo;s Role</h2> <p>Government incentives and other subsidies will be key to ensuring businesses continue considering refurbished hardware. In the December budget the Scottish Government allocated &pound;43m toward supporting this sector; the wider U.K. government needs to also consider how to incentivize companies to reduce or remove emissions from their supply chain.</p> <p>A good place to start would be for the U.K. government to update the super-deduction allowance, which lets British businesses claim back up to 25p for every &pound;1 they invest in &ldquo;qualifying&rdquo; machinery and equipment, before it ends in April 2023.</p> <p>Refurbished machinery isn&rsquo;t currently included in this allowance but &ndash; given the crucial role it has played in helping businesses access lower-cost, quality machinery while supporting carbon-friendly business decisions &ndash; it should be. VAT was taken off renewable energy purchases in the March 2022 budget announcement; surely a similar measure could be introduced to encourage refurbished purchases?</p> <h2>Looking Ahead</h2> <p>In the face of widespread price increases across the economy, businesses everywhere are looking at how to reduce their spend, while governments look to reduce waste and carbon emissions. The circular economy is the ideal marriage of these two goals.</p> <p>The U.K. government has already recognized in its strategy that the circular economy can play a key role in driving down emissions and positively contributing to the global climate setting agenda. But if the government wants to show it is serious about meeting its net zero target by 2050, refurbished equipment needs to be prioritized and support given to businesses to enable more carbon-friendly investment decisions.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/circular-economy" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Circular Economy</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/circularity" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Circularity</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/information-technology-it" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Information Technology (IT)</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="How Tech Companies Can Support the Green Economy - Future of Sourcing" addthis:url="http://futureofsourcing.com/how-tech-companies-can-support-the-green-economy"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Sun, 15 May 2022 17:00:00 +0000 Nick Stapleton 2177 at http://futureofsourcing.com http://futureofsourcing.com/how-tech-companies-can-support-the-green-economy#comments ESG Risk Assurance – An Opportunity for Transparency and Trust http://futureofsourcing.com/esg-risk-assurance-an-opportunity-for-transparency-and-trust <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/ESG%20Risk%20Assurance.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/ESG%20Risk%20Assurance.jpg" title="Building trust in ESG practices is complicated by the lack of transparency and consistency in reporting practices, the pace of change in reporting requirements, and huge regional and corporate variations." class="colorbox" rel="gallery-node-2175-6oeySZQaoJg"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/ESG%20Risk%20Assurance.jpg?itok=7D1XOGeW" width="624" height="325" alt="Building trust in ESG practices is complicated by the lack of transparency and consistency in reporting practices, the pace of change in reporting requirements, and huge regional and corporate variations." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Building trust in ESG is complicated by the lack of transparency and consistency in reporting practices, the pace of change in reporting requirements, and huge regional and corporate variations says Heather Moore, Sustainability Technical Director at LRQA. She shares how the right insight makes it possible to develop reporting practices that stand up to stakeholder scrutiny and future-proof businesses against ever-evolving regulations.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/four-resolutions-for-supply-chain-esg-management">Four Resolutions for Supply Chain ESG Management</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>Customers, employees and investors are increasingly putting ESG front and center when making decisions about the companies they engage with. <a href="https://www.ft.com/content/e3b09230-1f52-4a79-a680-1532dffc4be8" target="_blank">Rising shareholder and consumer activism</a>, as well as new forms of regulation, mean that it is no longer enough to simply state good intentions. The challenge is to prove to stakeholders that policies and initiatives are translating into meaningful action and impact.</p> <h1>Setting Standards</h1> <p>The currency at stake is trust, arguably the most important asset of any business or brand. To establish trust, third-party corroboration is key.</p> <p>Standards set by bodies such as ISO have long been established as marks of trust and integrity. In the world of sustainability, verification and assurance standards such as WBCSD/WRI GHG Protocol, ISO 14064, SASB, and TCFD are widely recognised by investors and stakeholders and support the comparability and transparency of reported ESG data.&nbsp;&nbsp;</p> <p>The problem is that the material topics for each industry can be so varied that there are no globally recognized standards for many of the requirements. In fact, there is still much international debate on the definition of the word &ldquo;sustainable,&rdquo; which &ldquo;environmental&rdquo; measures should be tracked and what exactly &ldquo;social&rdquo; responsibility should cover. So how can businesses evaluate their performance against robust benchmarks?</p> <h2>Uneven Progress</h2> <p>The fastest progress being made is in the area of carbon tracking, with concerted efforts to establish agreement on measurement and science-based targets concentrated around UN climate change meetings and being driven by organizations such as CDP &ndash; a global non-profit that runs an environmental disclosure system for companies, cities, states and regions.</p> <p>At COP26 in Scotland, the International Sustainability Standards Board (ISSB) was launched as an independent, private-sector body that develops and approves IFRS Sustainability Disclosure Standards. This will undoubtably help to increase transparency when it comes to accounting, but it has been recognized by many observers, such as <a href="https://ssir.org/articles/entry/fixing_the_s_in_esg" target="_blank">Jason Saul</a>, Executive Director of the Center for Impact Sciences at The University of Chicago, that much of the focus on ESG performance to date has been on those outcomes that are most easily measured and quantified by the world of finance.</p> <p>For both social and environmental impact, there are many more activities and measures that go beyond the balance book, including health and safety, well-being and responsible sourcing. This is not just a question of compliance; many companies undertake pro-social policies and behaviors that positively impact lives and the environment. It is these actions that do the most to establish brand purpose, driving competitive advantage and business growth. However, such social impacts are often not widely measured in ESG data, leaving the &ldquo;S&rdquo; overlooked.</p> <h2>Defining Values</h2> <p>All businesses are at different stages on their journey and there is not a one-size-fits-all solution that can be applied. In the absence of global consistency, businesses can seek to establish an assurance strategy which takes into account their own progress as well as that of their industry and comparable sectors.</p> <p>Organizations that correctly identify material topics in its industry and develop internal policies against measurable targets and goals to reflect its declared values and position in its journey toward sustainability will generate trust with its stakeholders. They will also be able to demonstrate actions with progress audited against baselines that are set in line with its policies.</p> <p>Policies developed in this manner allow organizations to maintain visibility, not only of its own impacts, but also of its own suppliers and sub-contractors further down the chain. This provides an opportunity to prove wider positive impact and leadership beyond the immediate responsibility of an organization, while building stronger relationships with suppliers and establishing more agile methods of achieving quality and control.</p> <p>The process of operating to, and being independently audited against, these measures enable better monitoring, understanding and management of performance. This ensures that efforts are made in the right areas of the organization that will have the greatest positive impact.</p> <h2>Future-Proofing for Regulation</h2> <p>Businesses that can establish robust ESG auditing will be well placed to anticipate new regulation, without being shaped reactively by it. A good example of this is <a href="https://www.jdsupra.com/legalnews/eu-proposes-mandatory-human-rights-and-6081814/" target="_blank">the EU&rsquo;s proposed directive for mandatory human rights and environmental due diligence</a> across global value chains. The proposed directive could result in costly penalties for businesses and directors for non-compliance and include a civil liability regime to allow victims to sue companies for harm resulting from the company&rsquo;s failure to comply with diligence obligations.</p> <p>There is more reputational value in moving ahead of such initiatives, while still in their early stages, by demonstrating positive behavior before others follow suit in compliance. Designing and adapting risk assurance programmes based on expert knowledge of variations in international policy will protect these investments made in reputation once regulators and competitors catch up.</p> <h2>Don&rsquo;t Get Left Behind</h2> <p>To gain first-mover advantage, businesses that want to achieve the greatest return on their ESG strategy need to establish robust methods of measurement and assurance now. The alternative is to remain reactive, forced by regulators to move later, risking reputational damage and playing catch-up to remain competitive in an increasingly ESG-focused world.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/environmental-and-social-governance-esg-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Environmental and social governance (ESG)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/risk" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Risk</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/governance" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Governance</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="ESG Risk Assurance &amp;ndash; An Opportunity for Transparency and Trust - Future of Sourcing" addthis:url="http://futureofsourcing.com/esg-risk-assurance-an-opportunity-for-transparency-and-trust"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Wed, 11 May 2022 02:00:00 +0000 Heather Moore 2175 at http://futureofsourcing.com http://futureofsourcing.com/esg-risk-assurance-an-opportunity-for-transparency-and-trust#comments Addressing Carbon Emissions in the Supply Chain Through a Circular Economy http://futureofsourcing.com/addressing-carbon-emissions-in-the-supply-chain-through-a-circular-economy <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/Addressing-Carbon-Emissions-Supply-Chain-Through-Circular-Economy.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/Addressing-Carbon-Emissions-Supply-Chain-Through-Circular-Economy.jpg" title="Corporate value chain emissions – also referred to as Scope 3 emissions – account for 92% of an average business’s emissions." class="colorbox" rel="gallery-node-2168-6oeySZQaoJg"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Addressing-Carbon-Emissions-Supply-Chain-Through-Circular-Economy.jpg?itok=peI45lnl" width="624" height="325" alt="Corporate value chain emissions – also referred to as Scope 3 emissions – account for 92% of an average business’s emissions." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Corporate value chain emissions &ndash; also referred to as Scope 3 emissions &ndash; account for 92% of an average business&rsquo;s emissions, says Cassandra Julin, Head of Global PR for Normative. She explains how a circular economy helps businesses account for and reduce these emissions.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/procurements-carbon-transparency-problem">Procurement’s Carbon Transparency Problem</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>Today, most businesses operate in a linear economy. We use materials to produce products and when we&rsquo;re done using those products we discard them as waste &ndash; the &ldquo;take, make, and waste&rdquo; system.</p> <p>In a <a href="https://ellenmacarthurfoundation.org/topics/circular-economy-introduction/overview" target="_blank">circular economy</a>, we keep materials and resources in circulation as long as possible, without producing any waste.</p> <p>Fundamental principles in a circular economy:</p> <ul> <li><strong>Eliminate</strong> waste and pollution</li> <li><strong>Circulate</strong> materials and products</li> <li><strong>Regenerate</strong> nature</li> </ul> <h2>Greenhouse Gas Emissions: A Quick Overview</h2> <p>Greenhouse gasses (GHGs) are gases that when released in the atmosphere contribute to the warming of the planet.</p> <p>The Greenhouse Gas Protocol &ndash; the defining framework for GHGs &ndash; divides these emissions into <a href="https://normative.io/insight/scope-1-2-3-emissions-explained/" target="_blank">three scopes</a>: Scope 1, Scope 2 and Scope 3.</p> <p>Scope 1 covers direct emissions that a company generates while performing its business activities. Scope 2 covers indirect emissions from purchased energy, while Scope 3 covers indirect emissions in the value chain.</p> <p>On average, 90% of a company&rsquo;s emissions come from Scope 3. Reducing emissions is necessary to meet this goal &ndash; in any kind of economy.</p> <h2>Designing Out GHG Emissions</h2> <p>By its nature, a circular economy will have lower carbon emissions than a linear economy. Producing new materials results in carbon emissions; circular economies minimize the need for producing new materials by maximizing the re-use of resources, thus eliminating the carbon costs of producing new materials.</p> <p>Put another way: the circular economy attempts to design out waste and carbon emissions are almost always waste.</p> <p>An estimate from the 2021 <a href="https://www.circularity-gap.world/2021" target="_blank">Circularity Gap Report</a> claims that a circular economy could reduce global GHG emissions by 39%.</p> <h2>Supply Chain Accountability Enables Targeted Reductions</h2> <p>Businesses and their value chains have a key role to play in achieving Paris-aligned climate targets. The latest climate science makes clear that to avoid the worst impacts of climate change, we must limit global temperature rise to 1.5&deg;c.</p> <p>That means cutting global emissions in half before 2030 and reaching net-zero emissions before 2050, which can only be achieved if we start measuring and reducing emissions in an accurate and systematic way.</p> <p>The full value chain must be taken into account when reducing and measuring emissions. This includes Scope 3, which for many businesses are responsible for the vast majority of emissions: the average business sees 92% of its emissions originating in Scope 3, according to <a href="https://cdn.cdp.net/cdp-production/cms/reports/documents/000/005/554/original/CDP_SC_Report_2020.pdf?1614160765" target="_blank">a 2020 CDP report</a>.</p> <p>By identifying circular changes like those in production, transportation and material use, the circular economy can be a catalyzer for reaching the climate targets.</p> <p>For example, when working to measure and reduce the emissions for Flying Tiger Copenhagen, we helped them discover that textiles were one of their biggest emissions hotspots. They had a strategy in place for reducing emissions from solid materials like plastic, but none in place for textiles. With this knowledge, they were able to have a more circular approach to their material sourcing &ndash; and as a result reduce their emissions.</p> <p>The recent <a href="https://www.circularity-gap.world/2021" target="_blank">Circularity Gap Report</a> concludes that circular strategies can reconfigure supply chains to bypass emission hot-spots, and that with processes extending the lifespan of the material &ndash; such as repair &ndash; excess virgin material extraction would be reduced and fewer GHGs would be emitted.</p> <h2>Success Requires Engaging Value Chains</h2> <p>Given that Scope 1 and Scope 2 emissions are only the tip of the iceberg and that the majority of emissions are located in a businesses&#39; value chain, addressing the value chain is key in order to succeed in reducing carbon emissions.</p> <p>Taking responsibility for your value chain &ndash; which might seem outside of your control &ndash; can feel overwhelming. But with smart strategies in place, the value chain is where businesses can make a real impact.</p> <p>Small changes can result in big reductions. For example, even if you can&rsquo;t control the production methods used in your value chain, changing the materials used can still have a large impact.</p> <p>Small businesses, especially, can gain competitive advantages when they take control of their emissions. Today&rsquo;s suppliers compete not only on price, but also on sustainability factors &ndash; so being able to show sustainability commitments to purchasers can be key to winning contracts.</p> <p>For businesses looking to reduce their carbon emissions, the journey can seem complicated and confusing. But you don&rsquo;t have to go it alone. Carbon accounting companies support hundreds of businesses every day with measuring and reducing their emissions, all the way through their value chains.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/scope-3-emissions" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Scope 3 Emissions</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/circular-economy" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Circular Economy</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/normative" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Normative</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Addressing Carbon Emissions in the Supply Chain Through a Circular Economy - Future of Sourcing" addthis:url="http://futureofsourcing.com/addressing-carbon-emissions-in-the-supply-chain-through-a-circular-economy"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Mon, 18 Apr 2022 17:00:00 +0000 Cassandra Julin 2168 at http://futureofsourcing.com http://futureofsourcing.com/addressing-carbon-emissions-in-the-supply-chain-through-a-circular-economy#comments Sustainability Goals Will Be Driven by Innovation http://futureofsourcing.com/sustainability-goals-will-be-driven-by-innovation <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/Sustainability-Goals-Will-Be-Driven-by-Innovation.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/Sustainability-Goals-Will-Be-Driven-by-Innovation.jpg" title="Action must be taken now, across businesses of all sizes, to reduce their carbon emissions and remove waste from the supply chain." class="colorbox" rel="gallery-node-2167-6oeySZQaoJg"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Sustainability-Goals-Will-Be-Driven-by-Innovation.jpg?itok=xDRZWo8P" width="624" height="325" alt="Action must be taken now, across businesses of all sizes, to reduce their carbon emissions and remove waste from the supply chain." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Evolving customer needs are influencing business and buying decisions, says&nbsp;Debbie Shakespeare, Senior Director of Sustainability, Compliance, and Core Product Line Management at Avery Dennison RBIS.&nbsp;She makes the case for why action must be taken now, across businesses of all sizes, to reduce their carbon emissions and remove waste from the supply chain.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/the-technologies-driving-esg-focused-supply-chains">The Technologies Driving ESG-focused Supply Chains</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>Consumer attitudes toward sustainability have been intensified by the pandemic. Global lockdowns caused a temporary reduction of industry and transport, and consumers noticed the benefits this had on their environment. As such, the pandemic provided a reckoning moment and spurred hope for the future of the environment. Even as normal activity resumed in Q3 2020, these intentions to implement change remained.</p> <p>One eye-opening stat from an August 2021 survey revealed that <a href="https://www.elavon.co.uk/news/2021/consumers-seek-ethical-and-local-brands-digital-payments-are-on-the-rise.html" target="_blank">90% of British consumers</a> plan to buy from eco-conscious brands going forward. This emulates just how dedicated consumers are to making responsible decisions that will benefit the environment in some shape or form, enabling them to live more circularly.</p> <p>In a report commissioned by Avery Dennison RBIS, conducted with GWI, it was revealed that globally, over 60% of fashion buyers wanted more transparency about where their clothing had come from and how it was made. This report demonstrated how eager consumers are to reduce waste and support more circular models for living.</p> <p>Further, this consumer survey also found that 62% of global fashion shoppers want brands and retailers to make end-of-life options accessible for their products. As it stands, the majority of brands lose visibility of what happens to a garment when it leaves their store, yet this research helps demonstrate that consumers still hold them accountable, post-purchase. 62% of shoppers said that brands and retailers should make end-of-life options available for their products, with 58% saying that fashion brands should help people mend items and a similar number wanting brand support in re-sale.</p> <p>It&rsquo;s no secret that evolving customer needs are what influence business decisions, particularly in retail. Ignoring this focus on eco-consumerism runs the risk of losing otherwise loyal customers who want to live more sustainably. As we saw from 2021&rsquo;s COP26 coverage, action must be taken now, across businesses of all sizes, to address customer preferences.</p> <p>The pressure is mounting on businesses to do everything in their power to reduce their carbon emissions and remove waste from the supply chain. Then they must go one step further and educate the public on their achievements and sustainability goals. This is critical. Without this, customers will simply overlook the brand.</p> <h1>Being Held Accountable</h1> <p>Setting sustainability goals requires a new way of thinking, as well as a level of transparency and collaboration across businesses and throughout supply chains. For so long, brands have been accused on greenwashing when they market their sustainability story. Now, they&#39;re trying to switch to authenticated data and be more transparent.</p> <p>The challenge is that when working across a long, complex international supply chain, it&rsquo;s sometimes difficult to reveal everything, particularly in such a competitive market. The answer will be working together and taking a region-specific approach rather than going at it alone. It is only by bettering one another that we will reach the collective goal. Delivering on sustainability goals requires an adaptation of thinking, for example a focus on doing more with less, or developing innovative new products that will instigate change.</p> <p>It is innovation that has underpinned Avery Dennison&rsquo;s deep-rooted ESG strategy, and we recognise that accountability matters. In October 2021, we announced that our emissions reduction targets were approved by the <a href="https://sciencebasedtargets.org/" target="_blank">Science Based Targets initiative</a> (SBTi) as consistent with levels required to meet the goals of the Paris Agreement. This acknowledgment by the SBTi gives us confidence that we are setting ambitious scopes for emissions reduction targets, as we strive towards net-zero emissions, which we aim to achieve by 2050.</p> <h2>A United Front</h2> <p>As a large, global operation, we truly understand the value that linking with other players, small and large, who are demonstrating a niche industry specialism, has in enabling us to collectively address the issue of sustainability.</p> <p>Across our RBIS business, we work with countless businesses that specialize in the apparel manufacturing and fashion retail sectors. Together, we can help them take action and actively remove carbon from their supply chains via the use of data and digital tools.</p> <h2>The Time for Change&nbsp;</h2> <p>Businesses know they must track and report emissions if their sustainability strategies are to be credible. Pioneering brands like Patagonia and Allbirds are leading the way when it comes to enforcing positivity via regenerative agriculture.</p> <p>Other labels, including Reformation, have demonstrated their commitment to the environment by ambitiously and publicly pledging for climate positivity by 2025, and are on a journey to become <a href="https://www.vogue.com/article/can-fashion-be-climate-positive" target="_blank">&ldquo;climate neutral certified.&rdquo;</a></p> <p>It is hugely positive to see so many brands realizing the time is now to make a change, and this is soon to be enhanced by mandatory ESG reporting, with new environmental laws imminent around the world. Businesses need to set their own ambitious targets and assess how these can be achieved. This means exploring the potential of new technology and smart ideas, for the good of the planet.</p> <p>The commitment within the apparel industry to make the change has been achieved. The next step is how we move beyond commitments and talk to a stage of heightened activity. We need decisions, solutions and action quickly, before it is too late.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/avery-dennison" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Avery Dennison</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/environmental-and-social-governance-esg-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Environmental and social governance (ESG)</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Sustainability Goals Will Be Driven by Innovation - Future of Sourcing" addthis:url="http://futureofsourcing.com/sustainability-goals-will-be-driven-by-innovation"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Fri, 15 Apr 2022 02:00:00 +0000 Debbie Shakespeare 2167 at http://futureofsourcing.com http://futureofsourcing.com/sustainability-goals-will-be-driven-by-innovation#comments Digital Environmental Health and Safety Services Market is Set for Further Growth http://futureofsourcing.com/digital-environmental-health-and-safety-services-market-is-set-for-further-growth <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/Digital-Environmental-Health-Safety-Services-Market.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/Digital-Environmental-Health-Safety-Services-Market.jpg" title="Widespread corporate digitization, a focus on ESG and strategic pivots by leading consultancies to transform their service offerings with new technology is boosting the digital Environmental Health and Safety (EHS) services market." class="colorbox" rel="gallery-node-2163-6oeySZQaoJg"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Digital-Environmental-Health-Safety-Services-Market.jpg?itok=xTwGbXz_" width="624" height="325" alt="Widespread corporate digitization, a focus on ESG and strategic pivots by leading consultancies to transform their service offerings with new technology is boosting the digital Environmental Health and Safety (EHS) services market." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Widespread corporate digitization, a focus on ESG and strategic pivots by leading consultancies to transform their service offerings with new technology are boosting the digital Environmental Health and Safety (EHS) services market says Bill Pennington,&nbsp;who leads the Verdantix Environment, Health &amp; Safety practice. Now that C-level executives are starting to view EHS as an essential investment across all industry sectors, he shares the growth outlook for EHS services&nbsp;across a wide range of industry risk profiles.&nbsp;</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/procurements-increasing-csr-role">Procurement’s Increasing CSR Role</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The market for digital environmental health and safety (EHS) services has come through a period of uncertainty in the industrial world. Firms have struggled with the difficulties of the pandemic while trying to address pressing new priorities such as the climate crisis and the ESG boom.</p> <p>Uncertainty in the industrial world has benefited EHS consultancies with last year seeing an increase in spend on EHS-focused digital technology implementation, EHS platform integration and data analytics services even though the COVID recession is still affecting budgets.</p> <p>Verdantix&rsquo;s report<strong> <em><a href="https://research.verdantix.com/report/market-size-and-forecast-digital-ehs-services-2021-2026" target="_blank">Market Size and Forecast: Digital EHS Services 2021 &ndash; 2026</a></em></strong> reports that the market hit $2.7 billion in revenues at the close of 2021 compared with $2.4 billion the previous year even though the COVID-19 pandemic is still a major issue worldwide.</p> <p>Growth last year was ahead of previous forecasts highlighting the strength of the sector with expansion driven by factors including widespread corporate digitization, the focus on ESG and strategic pivots by leading consultancies to transform their service offerings with new technology.</p> <p>The traditional powerhouses of North America and Europe remained the largest EHS digital services spenders while the very high-risk EHS segments, such as oil and gas and mining, retained the highest market share. But the next five years could see growth in other regions as well as growth across the whole gamut of industries&rsquo; risk profiles.</p> <h1>The Next Five Years</h1> <p>The market is seeing an increase in digital services budgets across a wide range of industry risk profiles. As the lingering effects of the pandemic fade, we forecast the market will grow to $3.8 billion by 2026.</p> <p>The market spend of firms within the high- and medium-risk industry verticals is likely to grow at the fastest rate compared with the very high-risk sectors. This reflects the growing adoption of EHS technology outside the traditional oil and gas, mining and chemical top spenders, as C-Level executives start viewing EHS as an essential investment across all industry sectors.</p> <p>The risk profiles of the firms engaging in large EHS technology projects will expand to include a higher percentage of high- and medium-risk industries, such as construction and manufacturing. Potentially power utilities, ports and airports, maritime, airlines, forestry, and pulp and paper could also see growth.</p> <p>Many firms in these sectors are evolving from unsophisticated EHS processes, carried out on paper or excel, and are directionless on how to execute their digitization strategy. As a consequence, they are turning to the expertise and support of consultants to guide them through EHS technology road mapping, management of change strategy, as well as technology implementations and maintenance of solutions.</p> <p>COVID-19 has not gone away and will limit the compound annual growth rate (CAGR) of the market but the pace of expansion will speed up and take a steeper trajectory with a CAGR of 9% between 2024 and 2026.</p> <p>As corporate appetites for EHS digital solutions continue to grow the services market will continue to expand. North America will maintain its position as the highest regional spend for digital EHS services but emerging regions such as LATAM, APAC and the Gulf States are primed for quick growth. These regions will experience rapid growth as EHS software availability and demand increases and new technologies become increasingly accessible to these fast-growing economic markets.</p> <h2>The Sector View</h2> <p>EHS software implementation services are expected to remain the service line where most spending is concentrated. In part that is due to spending by mid-market firms to drive greater levels of efficiency and more insightful outputs.</p> <p>In addition to software, other EHS technology implementations will see strong growth making it the fastest growing revenue stream. Companies are increasingly investing in technology, such as EHS mobile applications to drive safety culture and connected devices used to mitigate specific high-risk hazards within the workplace. Digital services will be central for firms to consolidate EHS software and technology projects.</p> <p>System integration and data analytics revenue streams will take a bigger market share as enterprise-level firms look to link new IoT EHS technology within their portfolios to form connected platforms. Several service providers have already made EHS integrations their primary digital offerings.</p> <h2>The Future is Bright</h2> <p>The economic hangover of COVID-19 is lingering and the global economy&rsquo;s K-shaped recovery pattern is expected to continue throughout 2022, with a number of industries, such as airlines and oil and gas still set to struggle.</p> <p>Last year also saw firms under increased regulatory and public pressure to address their environmental footprints. The tumultuous period has taught firms much about the integrity of their business infrastructure.</p> <p>Firms have accelerated EHS digitization strategies to strengthen their business resilience, with unprecedented levels of EHS technology pilot projects.</p> <p>Ultimately, uncertainty bred by nascent technology initiatives and challenges will see the demand for digital EHS services continue to grow, as firms rely on the subject-matter expertise and technical astuteness of consultancies to support projects.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/environmental-and-social-governance-esg-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Environmental and social governance (ESG)</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Digital Environmental Health and Safety Services Market is Set for Further Growth - Future of Sourcing" addthis:url="http://futureofsourcing.com/digital-environmental-health-and-safety-services-market-is-set-for-further-growth"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Wed, 06 Apr 2022 02:00:00 +0000 Bill Pennington 2163 at http://futureofsourcing.com http://futureofsourcing.com/digital-environmental-health-and-safety-services-market-is-set-for-further-growth#comments Procurement’s Carbon Transparency Problem http://futureofsourcing.com/procurements-carbon-transparency-problem <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/Procurement%E2%80%99s%20Carbon%20Transparency%20Problem.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/Procurement%E2%80%99s%20Carbon%20Transparency%20Problem.jpg" title="Sustainable procurement is no longer a corporate goal but a global one." class="colorbox" rel="gallery-node-2143-6oeySZQaoJg"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Procurement%E2%80%99s%20Carbon%20Transparency%20Problem.jpg?itok=aqAKxcW6" width="624" height="325" alt="Sustainable procurement is no longer a corporate goal but a global one." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Sustainable procurement is no longer a corporate goal but a global one, says SIG CEO and President Dawn Tiura. She outlines the important role that procurement can play in the fight against climate change.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/looking-for-a-career-in-sourcing-and-procurement-heres-how-to-get-started">Looking for a Career in Sourcing and Procurement? Here’s How to Get Started</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The dramatic predictions within the United Nations&nbsp;<a href="https://www.ipcc.ch/sr15/" target="_blank">Intergovernmental Panel on Climate Change Special Climate Report</a>&nbsp;published earlier this year called attention to the consequences of continued carbon emissions, and corporations around the globe have taken notice.</p> <p>From CPG giant P&amp;G to tech powerhouse Hitachi, large enterprises are committing to net-zero emissions across their supply chains by 2050. From the pollution produced by shipping to the waste created by non-recyclable and bio-based packaging, supply chains represent a massive portion of a company&rsquo;s carbon inventory &mdash; and therefore, a huge opportunity to potentially mitigate climate change.</p> <p>Procurement has a decisive role to play in shaping a brand&rsquo;s environmental impact, largely due to the complexity of enterprise-scale supplier networks and historical lack of visibility into value chain emissions. However difficult, the move towards carbon neutrality is imperative.</p> <p>Decisive action on the environment from corporate leaders requires understanding how procurement accounts for their carbon footprints, the challenges of accurate sustainability tracking and why changing how we account for offsets will affect our future.</p> <h2>De-Coding Suppliers&rsquo; Footprint</h2> <p>A study published by the&nbsp;<a href="http://www3.weforum.org/docs/WEF_Net_Zero_Challenge_The_Supply_Chain_Opportunity_2021.pdf" target="_blank">World Economic Forum</a>&nbsp;found that the top eight global supply chains account for more than 50 percent of global greenhouse gas emissions. The carbon footprint of global commerce is so large that achieving net-zero carbon emissions would be a major win in the fight against climate change.</p> <p>Although a corporation&#39;s carbon footprint is often referred to in its entirety, tackling it can be broken down into three areas. Companies accounting for their carbon emissions generally categorize their offsets as either Scope 1 and Scope 2 emissions (those produced directly by companies or indirectly through the purchase of energy) or Scope 3 (emissions that occur outside of direct control).</p> <p>Addressing Scope 1 and 2 emissions is an economic challenge, albeit one that&rsquo;s easier to take on proactively. While Scope 1 and 2 emissions represent two-thirds of a company&rsquo;s emissions accounting, Scope 3 emissions account for nearly 80 percent of their overall climate impact.</p> <h2>The Challenge of Indirect Emissions</h2> <p>Scope 3 emissions are those that occur through a company&#39;s value chain, the downstream and upstream channels that direct the flow of supply. Due to the complexity of monitoring the raw material production, transportation and distribution for Tier N suppliers, Scope 3 emissions are inherently the least accounted for.</p> <p>In fact,&nbsp;<a href="https://resources.ecovadis.com/news-press/ecovadis-2021-sustainable-procurement-barometer" target="_blank">EcoVadis research</a>&nbsp;shows that while corporate sustainability commitments have increased globally, delivering on goals, especially in the supply chain, remains a work in progress. Specifically, EcoVadis found that only 48 percent of supplier respondents believe that buying organizations they work with are truly engaged in sustainability and actively partners with them to foster sustainability practices in their commercial relationships.</p> <p>Instilling accurate carbon accounting within all areas of the procurement and sourcing process can uncover significant opportunities to reduce environmental impact. Many organizations began their carbon neutral journeys by organizing direct initiatives to optimize resource consumption. In its pledge to eliminate carbon offsets,&nbsp;<a href="https://packagingeurope.com/p-and-g-announces-commitment-to-net-zero-emissions-by-2040/" target="_blank">P&amp;G</a>&nbsp;noted that it had developed a technology that would eliminate the need to produce products that use polyolefin plastic, a toxic &quot;forever chemical.&quot; When coupled with value chain carbon reduction strategies, such mass material or product innovations can have a major impact.</p> <p>Taking on value chain sustainability is a more complex task. But it can be achieved through effective optimization of value chain partners and suppliers, and investments in more efficient processes, sustainable systems and equipment. If investing in entirely new processes or systems isn&rsquo;t logistically feasible, a company can replace or change their practices when necessary to eliminate unsustainable materials or processes and bring in environmentally friendly alternatives.</p> <h2>A Clean Value Chain</h2> <div> <p>Given the historical lack of reporting around Scope 3 emissions, it may appear there is still a long way to go in the fight to make our supply chains more sustainable. Yet,&nbsp;<a href="https://www.mckinsey.com/business-functions/operations/our-insights/making-supply-chain-decarbonization-happen" target="_blank">a simple exercise in creating a decarbonization pathway done by McKinsey</a>&nbsp;suggests that 30 percent of total Scope 3 emissions could be decreased through relatively straightforward measures, including optimization and procurement of low-carbon suppliers.</p> <p>Sustainable procurement is no longer a corporate goal, but a global one; and while creating carbon transparency is a challenge, it&rsquo;s a crucial step towards saving the planet and people that business serves.</p> </div> <p><em>This article was republished with permission from <a href="https://www.greenbiz.com/article/procurements-carbon-transparency-problem" target="_blank">Greenbiz</a>.</em></p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/scope-3-emissions" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Scope 3 Emissions</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/climate-change" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Climate Change</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/supplier-relationship-management-srm" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Relationship Management (SRM)</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Procurement&amp;rsquo;s Carbon Transparency Problem - Future of Sourcing" addthis:url="http://futureofsourcing.com/procurements-carbon-transparency-problem"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Tue, 01 Mar 2022 17:00:00 +0000 Dawn Tiura 2143 at http://futureofsourcing.com http://futureofsourcing.com/procurements-carbon-transparency-problem#comments