A three-step process for businesses to choose a sustainable supplier

SME Publications/ SME XPO 2024

By Charlotte Scallon, above, Head of Sustainability and Regulation, Biffa

Sustainability has become a fundamental pillar of responsible corporate practices in today’s rapidly evolving business landscape. Companies have realised that their commitment to sustainability extends beyond their operational boundaries as environmental concerns escalate and societal expectations evolve. Increasingly, companies are concerned about Scope 3 emissions – the indirect greenhouse gas emissions from their value chain activities, including those of their suppliers.

There are many schools of thought as to what constitutes sustainability and faced with so many recommendations for how to “green up” a business, businesses may be struggling to know where to start. So, here is my three-step strategy to help businesses understand how to choose a sustainable supplier.

Step 1 – Dissect your own sustainability goals  

The most important part of choosing a sustainable supplier is understanding what your business is trying to achieve. This means looking back at your sustainability strategy and the company’s measurements for success across, for instance, environmental impact, ethical sourcing, carbon footprint, waste reduction and more.

Recent data uncovered by Biffa in partnership with YouGov revealed that UK businesses employ a variety of means of measuring sustainability. The top three are reductions in carbon emissions and reductions in general waste (44%), and reductions in the volume of resources used (40%).

Businesses must set realistic metrics. It’s recommended that whichever measurements your business chooses are scientifically sound and achievable. The Science Based Targets initiative (SBTi) has recently validated that Biffa’s scope 1 and 2 carbon emissions reduction targets conform with the SBTi criteria and recommendations and are in line with a 1.5°C trajectory. Initiatives like these can help businesses keep their ambitions targeted and help to ensure they can collect and analyse the data they need.

Once businesses have clarity on their goals, it then becomes about putting this into practice. For instance, is your business looking to reduce your business’s carbon emissions or improve your recycling rates? These goals should direct every action your business takes to improve its environmental or social impact, including its choice of suppliers.

Step 2 – Understand how suppliers can help you achieve your goals 

After you understand what your business wants to achieve, it’s easier to assess how suppliers can contribute to those goals. For example – if, like 39% of UK businesses, your sustainable target involves increasing your closed loop recycling rates, it makes sense to look for suppliers who provide their products in recyclable packaging.

This understanding will help businesses develop clear sustainability criteria which suppliers must adhere to, to help businesses meet their internal goals. Researching and identifying the kind of activities, policies and certifications which contribute to sustainability will help you narrow this down. Consider online databases, industry reports, and trade associations to identify these.

Setting your criteria is the easier part; making it adaptable and achievable across your entire supplier base is more complicated. How you go about this will depend on your business size, scale, and needs.

Biffa is a large business with multiple facilities and a vast supplier network, so when we came to set our Scope 3 emissions targets, we understood that developing these targets with data from all our suppliers would be unnecessarily complex. So instead, we are taking a sample of our top carbon emitters.

Adjusting your approach to your supplier criteria in this way will make sure that, just like your internal targets, your suppliers’ targets will be achievable and can be evidenced.

Step 3 – Invite suppliers to prove their credentials  

Just as it’s essential to make sure your business can prove it is meeting sustainability targets, your suppliers need to be able to do the same. Assess the supplier’s sustainability performance by gathering information about their sustainability practices. This may involve crafting a series of targeted questions for suppliers or adjusting your assessment process to set expectations and gather data while taking proposals. You could also request information about the supplier’s own performance metrics, review their policies, certifications, and third-party assessments, request a site visit to see their environmental practices first-hand or ask for some examples of their recent sustainability initiatives.

A willingness to work together to achieve shared sustainability goals can greatly enhance the partnership. This process can help businesses seek out suppliers who are willing to collaborate and share best practices for sustainability. It may also be worth considering how you can engage suppliers on evolving sustainability strategies, in particular, those with tightening margins for success, to judge the relationship’s potential longevity.

Sustainable suppliers – unlocked

Trying to choose a sustainable supplier who helps you meet your goals can be challenging, but the process should be energising, not daunting. Our three-step strategy can help you break down the process into digestible steps to find suppliers that share your values and goals and are on the same sustainable journey as you.

Suppliers can be an important part of the sustainable business toolkit, and the investment of time it takes to find the best ones is worth it now and for a greener future.

SME Publications/ SME XPO 2024