In this blog, as part of our continuing series on why supplier engagement is crucial for ESG Reporting success, we explore how setting clear standards and expectations for your suppliers can drive greater engagement.

Understanding Scope 3 Emissions

Scope 3 emissions are the indirect greenhouse gas (GHG) emissions that occur in a company’s value chain. Unlike Scope 1 emissions (direct emissions from owned or controlled sources) and Scope 2 emissions (indirect emissions from the generation of purchased electricity), Scope 3 emissions encompass a broad range of activities, both upstream and downstream of a company's operations.

For many companies, especially those with extensive supply chains, Scope 3 emissions can account for the majority of their total carbon footprint. This makes addressing Scope 3 emissions a critical component of comprehensive ESG reporting.

Engaging Suppliers

In a recent blogpost, we discussed how creating a Supply Chain Map enables organisations to develop a identify key points of contact, and to develop a comprehensive understanding of their total GHG emissions. With a Supply Chain Map complete, the next step is to create a Supplier Engagement Strategy.

What is a Supplier Engagement Strategy?

A supplier engagement strategy is a comprehensive approach to building and maintaining productive, cooperative relationships with suppliers. It aims to align suppliers with your organisation's goals, values, and standards. An effective supplier engagement

With regards to Scope 3 emissions and ESG Reporting, an effective Supplier Engagement Strategy ensures that suppliers contribute positively to your supply chain's overall performance and help achieve strategic objectives and regulatory compliance.

Creating a Supplier Engagement Strategy

Understand

Organisations must first understand what information they need from an external regulatory perspective, and from an internal commercial strategy perspective. Establishing clear ESG standards for suppliers is essential for maintaining consistent and reliable reporting.

Educate

Communicate your ESG goals, standards, and reporting requirements to your suppliers. Consider offering training sessions or workshops to educate suppliers on ESG, Scope 3 emissions, and how to measure and report them.

Collaborate

Integrate ESG and Scope 3 emissions reporting standards into your procurement policies and supplier selection processes. Make ESG performance a key factor in supplier evaluations and decision-making.

Integrate

Create relevant workflows and processes that optimise the collection of relevant Scope 3 Emissions and ESG data. Minimising the operational impact on suppliers through integrations and automations can reduce errors and eliminate manual data processing.

ESG Reporting Software like SustainIQ enables organisations to automate and optimise the process of Supplier Engagement and the collection of Scope 3 emissions data.

Incentivise

Develop incentive programs that reward suppliers for meeting or exceeding ESG reporting requirements. This could include financial incentives, longer-term contracts, or preferred supplier status.

Monitor

ESG reporting and supplier engagement is an ongoing process that requires regular monitoring to ensure that regulatory and commercial objectives are being met. Assigning an internal ESG advocate can ensure that reporting in monitored and maintained.

Learn more

SustainIQ is an integrated ESG reporting platform that unifies all aspects of an organisation’s sustainability activities within a single environment. Businesses use SustainIQ to measure, monitor, and report on their social, economic, and environmental performance in real time.

Our software saves sustainability professionals from wasting time chasing teams, sites, and regions for reporting information. No more unreadable spreadsheets, awkward (and incorrect) calculations, and endless report building. With SustainIQ, simply pull, input or bulk upload data and get access to your custom-built report at touch of a button.

To learn more about SustainIQ or to arrange a demo click here.