What sellers really think about supplier engagement programs

As companies struggle to decarbonize supply chains, programs that help suppliers cut emissions have become a must-have component of climate strategies. 

But what do suppliers think of these efforts? More than 180 recently weighed in on the issue — and the results suggest buyers may need to recalibrate their efforts.

The comments came after the Scope 3 Peer Group, a collective of 4,000 professionals working to reduce supply chain emissions, posed a question to companies that sell to group members: “What do you most want customers to know about the reality of being a supplier asked to decarbonize?”

The suppliers were promised that answers would be anonymized. “Pour your heart out,” Oliver Hurrey, the peer group’s founder and chair, told them. And, he added, “they went to town.” 

“You ask us to decarbonise, then buy on price”

The top theme by some margin, mentioned in 43 percent of responses, was that while low-carbon options often cost more, contracts are still awarded on unit price. 

“The suppliers are actually willing,” Hurrey said. “They’re basically saying you’re not giving us practical, consistent or frankly believable commercial outputs.” Or as he puts it, summarizing the voice of the suppliers: “Once the sustainability team asks us to decarbonize, we do all this great stuff, and then we go to the commercial procurement team and they go, ‘What’s decarbonisation?’”

“Your specifications are our emissions”

Just under a quarter of respondents raised a second way large companies can undermine their own decarbonization efforts: requests for product specifications that limit sellers’ ability to reduce emissions. This inflexibility is critical because most of a product’s footprint can come from the materials a supplier purchases for manufacturing.

“Our customers usually specify what material to use and even which suppliers to use,” wrote one supplier. “If the customer wants us to decarbonize, these specifications need to align with the wish to decarbonize!”

“We spend more time reporting than doing”

Sustainability professionals at large companies often complain of the burden imposed by the many sustainability frameworks they are required to report under, which makes it somewhat ironic to hear that some buyers are imposing similar misery on sellers. 

“We are overwhelmed with questionnaires,” one respondent wrote. “The majority of time we receive no feedback or engagement as a result of our participation — only notices if we are delinquent.”

“Customers often require different methodologies, reporting platforms, data formats and timelines, creating significant resource demands,” another supplier said.

What better supplier engagement looks like

Suppliers also shared thoughts on how buyers and sellers could partner to more effectively drive decarbonization:

• Make carbon count: Include it in estimates and be clear about the premium on offer.
• Align the ask: Use common methods and platforms, including disclose-once tools and public data.
• Co-own the specs: Be open to changing material and sourcing specifications.
• Commit long term: Multi-year contracts and shared investment give suppliers a business case for decarbonization.
• Close the loop: Explain how data is used, give feedback and align sales with sustainability.
• Right-size for small and medium businesses: Make proportionate requests and use realistic timelines.

Further details on the responses will be shared when buyers and sellers meet at the Value Exchange Summit, a virtual meeting the peer group is holding from Oct. 20 to 22.