Simplify Supplier Sustainability Evaluation (+ An Exclusive Template)

As a procurement professional, ensuring your suppliers are acknowledging the role of sustainability within their practices is highly important for, not only the obvious – improving the planet – but building effective relationships and meeting your company's objectives.

What information do you actually need from your suppliers to make a fair sustainability evaluation?

Take a read below for details on the benefits of conducting a supplier sustainability assessment and a template to get you started in minutes.

What Should a Supplier Sustainability Assessment Contain?

A comprehensive supplier sustainability assessment should encompass various critical components to ensure a thorough evaluation and alignment with your organization's sustainability goals. Whilst for some components, there will be a black and white answer – if the supplier doesn't meet a specific target for example on completion of the assessment, they cannot be considered. Other components may enter more of a grey area – there isn't necessarily a right approach, but an intuitive decision is needed to ensure you will be able to work together effectively. 

Keep in the back of your mind if there are any specific targets like the above that you need to showcase in the assessment, before you start structuring the assessment and sending it out to suppliers.

Then, tackle the key elements below to conduct a robust supplier sustainability assessment:

Environmental Impact

Firstly, check if your supplier has a management person responsible for environmental sustainability – some will, some won't. This will confirm if you have a specific point of contact that can keep you up to date on any sustainability procedures in place.

You will need to evaluate your supplier's greenhouse gas emissions and energy consumption to determine the carbon footprint, as well as their typical waste generation and disposal practices, including recycling initiatives and waste diversion strategies. Do they have any water conservation efforts? Do they follow any energy-saving measures or have specific policies in place?
We'd recommend minimizing this section to a maximum of 12 questions to avoid overwhelm but leave open boxes where appropriate for them to give extra details. You can see an example of this in our supplier sustainability assessment template.

Labor Practices

Considering social sustainability is just as important as environmental impact. Whether you are examining the supplier's adherence to labor laws and worker welfare standards (are they paying fair wages and ensuring workplace safety?) or assessing their commitment to diversity and inclusion, these are all important elements to take into consideration.

You aren't only making sure they are a fair employer, but also a company whose values your organization aligns with. You therefore may want to see a little more from them, such as their community engagement or employee wellbeing initiatives if that is what your organization advocates for.

Ethical Sourcing

Working with a supplier can be a shot in the dark, but not if you ask them to be upfront with you surrounding the ethics of their supply chain sourcing. Do they have a specific ethical sourcing policy in place? Are they actively preventing child or forced labor within their supply chain?

Companies will often not disclose this information unless asked, and especially if not strictly following best practice, so it is important to use direct yes/no questions and ask for a copy of any policies alongside their response.

Alignment with ESG Goals

Supplier sustainability assessments can often over-focus on the here and now, but it's important to think about the future and long-term goals as well. Is the supplier actively working towards their company's ESG goals and if so, how? Let them share any achievements with your company, from certification to awards that can back up their claims.

You may also want to give them space to mention their future plans for maintaining sustainability practices, allowing them to detail their roadmap and ensure it aligns with your company's roadmap too.

Overall, there are lots of components to consider including in your supplier sustainability assessment. You may want to define measurable KPIs as a bonus to track the supplier's sustainability performance over time and evaluate progress.

Use our supplier sustainability assessment template to get started straight away.

7 Benefits of Conducting a Supplier Sustainability Assessment

As a procurement professional, conducting a supplier sustainability assessment offers a myriad of benefits that can positively impact your organization and supply chain. Some key benefits include:

Risk Mitigation:

By assessing supplier sustainability practices, you can identify and mitigate potential risks such as supply chain disruptions, regulatory non-compliance, reputation damage, and financial instability.

Cost Savings:

By choosing the right suppliers, your organization can achieve greater efficiency, reduced waste generation and operational excellence, leading to potential cost savings through increased productivity and resource conservation.

Enhanced Reputation:

Partnering with sustainable suppliers can enhance your organization's reputation, demonstrating a commitment to social responsibility and environmental stewardship, which can attract customers, investors, and other stakeholders.

Compliance and Legal Requirements:

Conducting sustainability assessments ensures that suppliers comply with relevant environmental, social, and labor regulations, reducing the likelihood of non-compliance penalties and legal issues.

Innovation and Product Quality:

Sustainable suppliers are more likely to invest in innovation, technology, and sustainable practices, leading to improved product quality, differentiation, and competitive advantage in the market.

Long-Term Partnerships:

Establishing relationships with suppliers committed to sustainability can lead to long-term partnerships built on shared values, trust, and mutual benefit, creating a stable and reliable supply chain ecosystem.

Global Responsibility:

Promoting sustainability through supplier assessments aligns with global sustainability goals, such as the United Nations Sustainable Development Goals, contributing to a more sustainable future for the planet and society.

By conducting supplier sustainability assessments, procurement professionals can not only drive positive environmental and social impact but also unlock tangible business benefits that enhance sustainability, resilience, and competitiveness throughout the supply chain.

Evaluate Your Suppliers' Sustainability With Our Exclusive Template

Ready to reach out to your suppliers regarding their sustainability practices?

Save time by downloading our supplier sustainability assessment template which includes all the sections mentioned above, plus a section for supplier information and a declaration to close it all off.

We hope this will help you begin the process of evaluating your suppliers with ease, or streamline the processes you already have.

Check out our resources page for more useful templates, market reports and on-demand webinars.