Published On June 09, 2022With 80% of global organizations* reporting on their environmental impact and a majority committing to reduce their carbon emissions year over year, it’s safe to say environmental, social, and governance (ESG) initiatives are a top priority for leaders across industries.
However, annual sustainability reports may not encapsulate the entirety of an organization’s environmental impact. Regulating bodies around the world are increasingly pressuring and even mandating organizations to include their supply chain vendors in their environmental disclosures.
Global climate consultancy experts at Carbon Trust estimate that up to 90% of an organization’s environmental impact falls within its supply chain. To back that up, research we conducted with Economist Impact indicates that more than 60% of organizations believe they need to improve visibility into their supply chains to foster overall business resilience.**
Think beyond your own carbon footprint
Measuring the impacts of an organization’s supply chain touchpoints means looking at scope 3 emissions. The Environmental Protection Agency (EPA) defines scope 3 emissions as “the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain.” This includes everything from “upstream” activities, such as sourcing raw materials to produce goods, to “downstream” activities, such as transportation and distribution or disposition of expired IT assets.
As you evaluate your scope 3 emissions impact, it’s also important to think beyond carbon; look at areas in your supply chain where you might be using a lot of water or generating waste. With so many moving parts (the EPA counts 15 total scope 3 emissions categories), it can be hard to track it all and, even so, not every piece is relevant to every organization. This is why it’s necessary to maintain governance by selecting vetted and responsible supply chain partners.
Here are three tips to help you engage with your supply chain to reduce your own environmental impact:
Align on materiality. To do this, you must first go through the process of conducting your own materiality assessment where you identify, refine, and assess environmental issues impacting your business. This type of assessment can help start a dialogue in your company around sustainability, what’s important to you, and how best to ensure your sustainability goals are met with like-minded vendors. Once you’ve narrowed your most material items to a few high-impact areas, you can use that information to select supply chain partners with similar sustainability goals. Find out if your vendors have conducted a materiality assessment with their key stakeholders, such as employees, leadership, customers, and investors. This exercise helps determine what is relevant and important to their businesses so that you can better prioritize and align with what is important to yours.
Gather and synchronize data. Data is essential to supporting any sustainability program. Organizations gather what is called “activity data” from key sources and calculate their impact. Choose supply chain partners who can easily provide you with data, and determine how it contributes to your environmental impact. For example, Iron Mountain customers can obtain tonnage data for their secure shredding program or an annual certificate of attestation validating green power usage for data centers.
Build community. Ask your vendors (and potential vendors) to tell you about their sustainability efforts. Then look at the work you do together. Start a conversation and discuss ways to reduce your combined impact. By building a community across your supply chain, you’ll experience environmental improvements that can lead to cost reductions, business opportunities, areas of innovation, and the chance to help support global climate change mitigation efforts.
Ask your supply chain vendors the right questions
To get a better sense of your organization’s work with existing supply chain partners, talk to your procurement team. They can provide you with a list of everyone your company works with and, from there, you can ask questions and use tools like EcoVadis and CDP Supply Chain to assess their sustainability efforts.
Whether you’re already working together or you’re evaluating new partners, consider asking:
Does your organization have a sustainability policy?
Do you release a Corporate Social Responsibility report?
Have you set any environmental goals?
Do any third parties verify your data?
What visibility do I have into the services that impact my environmental reporting?
How can you help me reach my environmental goals?
Stay accountable to your sustainability commitments
By including data from your supply chain partners in your reporting, your organization will establish itself as more accountable, comprehensive, and transparent when it comes to your sustainability efforts, which ultimately reflects the integrity of your brand. So, when it’s time to add a new partner to your supply chain, make sure your goals are aligned, ask them to provide you with the sustainability data you need, and start having regular conversations about ways you can lessen your overall environmental impact.
Learn more about how Iron Mountain can help support your sustainability goals here.
*The KPMG Survey of Sustainability Reporting 2020
**Research by Economist Impact, sponsored by Iron Mountain