With advances in connectivity and the power of technology to gather data, we have more information at our fingertips than ever before. According to IBM, by 2020, there will be 300 times more information available to use than there was in 2005 – a figure it puts at 43 trillion gigabytes of data.
Corporate sustainability managers are beginning to realize the benefits such information can have in supporting their environmental and social impact reduction efforts. Typically, the biggest impact a company can have on the planet sits outside its sphere of influence, along its supply chain. It is not uncommon for more than 80% of a company’s total end-to-end carbon impact to be found within the operations of its suppliers – and for its direct operational impacts to account for as little as 5% in many instances.
Supply chains can be large and complex, made up of tens of thousands of suppliers across the world spending hundreds of millions of dollars. Understanding who those suppliers are and what impact they are having on the planet is crucially important if the company is to reduce its overall impact.
Companies have only just started scratching the surface in understanding how they can gather, process, analyze and make the best use of data that will help them save money, make money, build more resilient supply chains and ultimately become more sustainable. More and more organizations are turning to software to help them get to grips with the supply chain data that will help to unlock these savings. An elaborate sustainability management system offers a centralized way to collate and manage data and report on the sustainability performance of suppliers. By inviting suppliers to answer a series of questions, it can automatically analyze the responses and identify any potential risks within the supply chain. Now, with a bird’s-eye-view of its supply chain hotspots, the sustainability team has access to clear and consistent information that allows them to work closely with suppliers to resolve any issues and to educate them about their company’s sourcing and commodity standards.
Complex environmental and social challenges are getting bigger all the time, particularly in unwieldy supply chains which often contain companies located in parts of the world most at risk from issues such as climate change and water scarcity.
Companies are realizing that having a full picture of their supply base, backed up by data that points to potential risk, will stand up to this increased scrutiny by consumers and the media – and help to protect their valuable corporate reputation.