By Danielle Doza
Sustainability is becoming increasingly significant in supply chains – from GHG emissions data, to reporting, to customer pressures, and more. If you are a supplier, you better start thinking about sustainability if you have not already.
The case was made today at the Sustainable Supply Chain Summit organized by Great Lakes Biomimicry and the Ohio Aerospace Institute. The event featured speakers from Parker Hannifin, Boeing, and EY – all companies heavily focused on sustainability. There were some exciting takeaways that affirm what we at VFS promote as the business case for sustainability.
Great Lakes Biomimicry emphasized the value that biologically inspired solutions bring to innovation. Carol Thaler stated a resonating idea from Charles Darwin: it is not the strongest or smartest that survive, rather, the one that is most adaptable to change is the one that survives. Businesses should take note.
Martha Connell, EHS and Sustainability Director, Aerospace Group, Parker Hannifin, gave an insightful presentation on how sustainability is embedded across the company and its competitive advantages. Parker sits in the middle of the supply chain, which means it receives sustainability inquiries and pressures from its customers and also works with its top 500 suppliers on the sustainability transition. Parker is using CDP as its preferred reporting structure for suppliers. The company completes an annual materiality assessment to better understand and address the material issues important to customers and other stakeholders. This level of commitment to sustainability is a model for other companies. We are even bigger fans of Paker now!
Boeing, a customer of Parker’s, is also heavily committed to sustainability. Paul Sim, Boeing’s head of Supply Chain Sustainability, pointed out that 92-94% of the company’s emissions come from burning fuel in Boeing planes. Focusing on sustainable aviation fuel is critical to allow the company to reduce its emissions. Sustainability is also a focus across its supply chain. Boeing has a Supplier Code of Conduct, for which the company is asking all suppliers to acknowledge, as a start. Boeing also uses CDP as a standard for suppliers, in addition to EcoVadis.
While these reporting methods are not mandatory for suppliers, Paul importantly stated that all companies need to focus on regulatory oversight (like the forthcoming SEC rules on Climate and ESG). He used the Game of Thrones metaphor “Winter is coming” as a way to say that such regulations – including the SEC and EU Corporate Sustainability Reporting Directive – will ripple through supply chains. While the regulations may not directly apply to a private company, the larger public companies will have to report and they will be asking their suppliers for sustainability/ESG information.
Cathy Vail, Assurance Partner with EY, works with several client companies that are at various levels of sustainability commitments. She presented some notable information to support the business case for sustainability, including:
- More customers are looking for an ESG score when choosing and prioritizing suppliers;
- Millennials identify corporate sustainability strategies as a crucial consideration for career decisions (from “Recycling in the Workplace: A Millenial View”, a study conducted by Lightspeed and Rubbermaid Commercial Products) (read more about the intersection of HR and sustainability on our recent blog);
- The sustainability reporting landscape is complex and evolving;
- Determine materiality for sustainability issues;
- Develop a sustainability reporting process (Hint: VFS can help!).
All three presenters said that sustainability is only growing and reporting will be more important, and perhaps mandatory, in the near future. The case was made – it is time to get on the sustainability train (or plane, if you’re using sustainable aviation fuel).
References:
- Recycling in the Workplace: A Millenial View – Sustainable Brands article
- How Sustainability Can Support HR
- VFS Reporting webpage
