How internal silos block supply chain progress
Companies are building collaborative supply chains – but the real work often starts inside the business. givvable founder Frances Atkins explains.
Key points
· Look out for silos and duplicated data
· Focus on continuous improvement
· Make it easy for suppliers to provide data
Internal silos and duplicated data remain real barriers to reliable sustainability improvements, despite growing efforts to make reporting cross-functional, says givvable founder Frances Atkins.
Large companies are increasingly bringing multiple teams into sustainability work – including finance, legal, risk, IT, and people and culture – bringing increased scrutiny and capability to sustainability efforts.
But the wider involvement also brings complexity, and risks creating a disconnect between reporting activity and the systems and supplier practices needed to drive genuine improvement.
“Reporting is not the outcome. Reporting is the output. It’s really important to remember that,” says Atkins.
Atkins says the solution starts with clarifying roles across teams, embedding sustainability practices into procurement processes, and integrating those practices into existing systems.
“Understand what each function is responsible for,” she says.
“It’s often the finance team or legal and risk that are doing the reporting, but the procurement teams are the custodians of the supplier relationship.”
Atkins was speaking at the The 2nd Impact X Summit for ESG Reporting & Disclosure in Melbourne, which gathered business leaders, finance directors and sustainability practitioners to discuss sustainability disclosure.
Collaboration matters
Almost all sustainability impact comes from a company’s supplychain, says Atkins.
That’s why companies need to implement a cycle of improvement that both evaluates existing suppliers to identify gaps and ensures new suppliers align with the company’s sustainability goals.
“If you combine those two processes together, what you should be seeing over time is an improvement in the portfolio of your suppliers from a sustainability and ESG perspective.
“Very simple – but it’s been effective.”
Data challenges
But getting quality information from suppliers remains an obstacle for many organisations.
A key reason for this is that fragmented and siloed workflows can lead organisations to return to suppliers multiple times – separately seeking data on different ESG issues.
“It is a huge burden for suppliers,” she says.
Fielding repeated requests for data is expensive and time-consuming for suppliers – and the result is often low-quality data.
Atkins says adopting a dynamic materiality approach can help solve this.
That means running a rolling assessment that reviews issues like climate, human rights and modern slavery together, rather in silos – and acknowledging that issues can shift from immaterial to material quickly as regulation and community expectations change. It also means supplier data must be regularly updated, not just collected at onboarding.
Making this work effectively for suppliers means automating data collection where possible.
givvable’s free supplier engagement portal aims to solve this problem, allowing suppliers to submit sustainability information once and have it made visible to multiple customers.
“They’re incentivised to do that, because they know that they’re not going to be spending $20,000 here with customer A and another $20,000 with Customer B to be answering all these questions.
“It’s really important to frame this as what is the benefit to the supplier in providing this information, and how can we streamline this across many of their customers, and not just one customer?”.
If you would like to learn how your business can implement a cycle of improvement in your Responsible and Sustainable Procurement program, contact our team.