Just over 11,000 companies submitted their environmental data to CDP, where they shared the impact it is having on their supply chains along with how they are working with buyers to take action to reduce them.
What is the role of technology?
Environmental action is needed at speed and scale to develop sustainable supply chains and deliver on worldwide ambitions such as the Paris Agreement. This is only possible through collaboration, both internally, to bring sustainability to the top of the agenda, and externally, throughout the supply chain. Solutions available today are effective, affordable, and needed to ensure business continuity. Although technology will not solve the climate crisis itself, AI-enabled technology can contribute significantly.
The combined procurement spend of CDP’s supply chain members totals $5.5 trillion. These companies are not yet making the necessary transformational changes to drive action at scale, where only 5% of suppliers reported they have put climate transition plans in motion, admitting changing procurement processes seem daunting.
CDP proposes its Sustainable Procurement Pathway which covers key aspects of a sustainable procurement strategy to achieve a consistent reduction of environmental impacts across the supply chain. How can it encourage companies to use technology as an enabler to improve their sustainable practices?
Through each pathway, it proposes ways to improve each effort along with KPIs to help leverage them. For the technology backbone companies can use data to their advantage:
- define data governance processes and checks
- create automatic reporting to collect the right kind of data, so suppliers can act upon it
- have a data-hub: integrate sustainability-related information
- ensure continuous data integration across the supply chain to make decisions to act on sustainability efforts
- manage processes to monitor spend analytics and procurement spend
Whilst companies are making efforts to manage their supply chains, inefficiencies and sustainability efforts, there is still a way to go. Technologies involving automation, digital, data, intelligence and blockchain can help reduce these problems to take one step closer to helping procurement become more sustainable.