Investors, regulators, consumers, and employees increasingly demand responsible products and services with a lower environmental impact. Sustainability is now crucial for business success. To combat climate change effectively, we need to cut industrial emissions in half by 2030, leaving no room for greenwashing. Businesses must adopt a full-lifecycle approach to reduce emissions, waste, and social injustice.
However, only 16% of companies have established sustainable practices with vendors and suppliers, despite 11% having terminated contracts for sustainability reasons. Furthermore, an EY 2022 survey revealed that 78% of investors support companies addressing ESG issues, even if it means sacrificing short-term profits.
Expectations are rising, and you need tools to equip yourself. The first step? Collaboration. Without it, you will limit any long-term sustainability success.
The Sustainability Mandate
- 43% emissions reduction required to stay within the critical 1.5 ºC limit by 20301
- 60% of Fidelity International analysts said regulation was one of the top three most important factors for driving change in regard to ESG2
- 61% of investors have declined to make or recommend an investment due to ESG concerns3
The SAP Business Network for Procurementallows you to easily discover diverse suppliers who are committed to sustainable business practices, compliances, and measurements.
- Search for suppliers that align with your needs and view their activity data and credentials to support your environmental and diversity goals. Profiles can include certifications from partners like D&B and EcoVadis, helping buyers evaluate the value and consistency of suppliers' standards. Access is available through SAP Ariba Procurement Solutions.
- In addition to the discovery capabilities, buyers can view supplier sustainability commitment via Certification Management and Sustainability Ratings on a given Supplier’s Trading Partner Profile, a crucial consideration, especially in light of the increasing prevalence of ESG scores and ratings focus by investors (accelerating the need for transparency in ESG performance).
- SAP’s self-assessment library provides standard content for Human Rights regulations, enabling suppliers to complete questionnaires that help buyers save time and reduce onboarding cycles. These assessments facilitate data sharing and simplify monitoring suppliers' environmental, social, and ethical performance, streamlining compliance with stricter regulations.
Sustainability leaders are far more likely to take decisive action when their partners fail to meet sustainability goals: one in five have terminated a contract with a vendor or supplier that did not meet expectations (according to an SAP study with Oxford Economics). Discover and work with those who do.
The SAP Business Network for Procurement unlocks unified supplier profiles, verified sustainability ratings, and supplier self-assessment questionnaires.
Check out the video to see how the SAP Business Network for Procurement assists organizations in achieving their sustainability goals.
Evaluating Sustainability Solutions through SAP Business Network for Procurement
Let’s summarize what you have learned:
- The SAP Business Network for Procurement boosts supply chain sustainability with transparent collaboration and insights into suppliers' eco-friendly practices.
- SAP tools like Sustainability Data Exchange help reduce emissions and waste, supporting carbon neutrality and brand trust.
Sources:
- Figure 2.5 IPCC, 2023: Climate Change 2023: Synthesis Report. Contribution of Working Groups I, II, and III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change [Core Writing Team, H. Lee and J. Romero (eds.)]. IPCC, Geneva, Switzerland, 184 pp., doi: 10.59327/IPCC/AR6-9789291691647
- ESG Analyst Survey 2023, Fidelity International, May 2023.
- 2023 Sustainable Investment Survey, PitchBook, 05 July 2023.