Navigating the Path to Enhanced Supply Chain Accountability and Sustainability

Have you found that your suppliers, or your customers, have been wanting to get to know you a little better lately?

If not, it is highly likely that you will soon.?

There are several drivers for companies trying to get a stronger grip on their supply chains, with a particular imperative coming from forthcoming regulatory changes. When the EU Corporate Sustainability Reporting Directive (CSRD) becomes operational, it will require many companies to report on wide-ranging sustainability factors for both their own operations and value chains – in some cases starting as early as 2025.?

The companion Corporate Sustainability Due Diligence Directive (CSDDD) will require companies to disclose their efforts to identify, prevent, and mitigate adverse human rights and environmental impacts – also in their own operations and value chains.??

This is more familiar territory for some sectors than others. Companies engaged in the manufacture of medical devices, IT hardware, and renewable energy technologies are already engaging with their suppliers, some spurred by the EU's Conflict Minerals legislation. Many fashion retailers have been getting to grips with complex international supply chains for years, given the varied human rights risks in that sector.?

For others, however, this is a new concept and, given the range of topics potentially in scope, it can be challenging to know where to start. Business In The Community Ireland (BITCI) encourages members not to see improved supply chain accountability as purely a compliance exercise. Instead, in-depth supply chain knowledge can be the key to sustainability performance, resilience, innovation, and reputation.?

For instance, to achieve necessary carbon reduction targets, companies will need to understand their suppliers’ emissions profiles, but also understand the strengths, challenges, and competing demands being experienced by those suppliers. Only by understanding those nuances can they design the supports and collaboration needed to manage emissions across Scopes 1, 2, and 3.?

As climate impacts increase, they will drive increased supply chain risks and volatility; think of crop failures or yield fluctuations; shipments of medical supplies delayed due to storms or flooding; or human rights risks from construction workers or agricultural laborers exposed to extreme heat while working. Again, such issues will need to be fully understood so they can be mitigated and managed.?

At BITCI's quarterly Munster Members' Network meeting in May, our members heard first-hand from co-hosts KSG Catering and University College Cork the ways in which they have collaborated to meet increasingly ambitious sustainability targets. As UCC's catering contractor, KSG has helped to deliver – among other things - sustainable reduction in food waste and a plastic-free campus with zero tolerance for single-use items.?

Learnings from the partnership included the value of procurement through dialogue, with contracts negotiated to identify the best possible solutions available at the time. Ongoing dialogue has been a feature of the relationship, with both sides looking to build in new learnings and innovations throughout the contract's lifetime, supported by constant performance tracking through innovative data collection methods.?

There is no magic bullet to understanding and driving improvement in your supply chain. Ultimately, it will come down to research and relationships, and dynamic engagement to capture information, build capacity, and identify areas for collaboration.?

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How can BITCI Members get involved??

BITCI is working with several members on separate phases of supplier engagement and supporting members collectively and individually to prepare for – and leverage possibilities from – the CSRD and CSDDD.

To discuss how we can support you, please contact:?

• ?Laura Morrison, sustainability adviser at ?[email protected]
• Feena Kirrkamm, sustainability executive?at [email protected] ???