Our recent webinar, “Navigating to Net Zero: Vizibl’s new SBTi Supplier Engagement Framework”, was a huge success, and prompted lively discussion throughout. We weren’t able to answer all your questions during the webinar itself, so we have put our heads together to answer all of them in the blog post below.
Our recent webinar, “Navigating to Net Zero: Vizibl’s new SBTi Supplier Engagement Framework”, was a huge success, and prompted lively discussion throughout. We weren’t able to answer all your questions during the webinar itself, so we have put our heads together to answer all of them in the blog post below.
If you’d like to revisit the webinar itself, you can watch it on demand right now!
Tim: I think there’s moving the supplier in terms of their levels of maturity, so when you’re making requests out to suppliers, when you’re onboarding suppliers, start pushing them and encouraging them to move towards reporting on CDP, committing to SBTs and so on. I know there was a question earlier about SBTi, so take a look at that 8 Steps guide that we referenced earlier and again, we can send you a link. It’s a good way of getting an understanding of how you get started on SBTs.
Tim: One thing that we’re seeing from clients and prospects is the growth of the “unicorn” RFP - in other words, clients are putting out requests to vendors for an all-in-one supercharged solution that can do the measuring, the data gathering, the acting and the verification, all of the elements you need within your programme.
The problem with these “unicorn” RFPs is, they can often turn into “Frankensteins” because you’ve got to be super clear that no supplier is going to give you an end-to- end solution. If a supplier is saying they can give you an end-to-end market leading solution, I would put some serious question marks against that.
So from our perspective, we're very clear on what we are and what we're not. Many of you were probably at the Gartner ProcureTech event earlier in the year where one of the Gartner leading analysts said ‘every single ProcureTech vendor seems to now be a sustainability solution’ and they were getting quite frustrated. So it’s up to us as vendors to be very clear to you as clients as to what we do and what we don’t do.
Vizibl is very clear that we are not a carbon accounting tool. There are some amazing tools out there, we can recommend several we have worked with. What we’re about is bringing that data in and being agnostic in terms of that data and future proofing it for you, because those data sources will change and evolve over time, and then driving the action piece. Being that one place where you're coordinating supplier data, and driving actions off the back of that.
So if you are one of those organisations that are putting together a “Frankenstein” RFP to ask vendors for an all in one solution, I would just ask you to think about perhaps breaking it down into their constituent parts and looking at what's best for your organisation. Also thinking about which of those suppliers and which of those vendors play nice with each other, which vendors have got experience of working with other vendors, which organisations have got that experience of working with data sources like Ecovadis, SBTi and CDP, all of those sorts of organisations as well.
Sarah: I think on that second part of your point Tim, if you’re actively looking at starting an exercise to build an RFP to source a supplier sustainability application, I'd just recommend that you’re very clear on what you want to achieve as a result of that RFP. So we’ve seen typically over the last 12-18 months that a lot of the inbound RFPs that we’ve received for a supplier sustainability application have changed.18 months ago we saw RFPs that were predominantly looking for a measurement tool, a carbon accounting platform. Today, we are seeing a move towards platforms that can actually be that place that you go and then take action with your suppliers. You’re very unlikely to find a platform that is going to do both of those things for you and certainly do both of those things that are going to get you to the point where you can meet regulatory requirements that are upcoming and really provide that full audit trail. So you are looking at a stack of vendors that do different parts of that sustainability journey. We’ve got an RFP toolkit which I can happily share with anybody who is interested afterwards.
Soizic: Really the skills themselves are to make sure that people obviously have clear missions, clear activities, and they really need to focus on communication. Make sure that they communicate with their supplier and that they share any files and have real collaboration and not submitting suppliers to specific tasks but actually collaborate together towards specific goals. For example, right now, the sustainable topic is coming into procurement right now. Provide them with specific knowledge to make sure that they engage maybe with their suppliers on those specific topics and incorporate them during that collaboration. That's I think that's really the key at the minute.
Sarah: I've been working in the procurement industry for about 20 years now, and where we’ve seen that historic skillet of cost saving and negotiation being really at the forefront. That's ever present, that's never going to go away, but the people that you're going to be looking to run your supplier engagement programmes, specifically sustainability, the sort of soft skills you're looking for are those people that are the great communicators, the great relationship builders, and probably one of the most important skills you should be looking to build and to leverage within that team is, is those people that have great ability to influence. It's not just influencing within your own organisation, it's influencing with the supplier organisation as well.
Sarah: We have an ongoing partnership with CDP. We're one of their accredited service providers and we have a data partnership with them. So Vizibl customers can automatically get access to that particular supplier's scores for CDP.
And you also asked about Ecovadis and other data providers. So while those parties may require specific licence agreements, for example, Ecovadis, while we have preconfigured integration APIs, we would need a customer specific licence key to access that content from Ecovadis. So it depends on where the data is coming from. The CO2e spend factor calculators and CDP come as part of the package, but other providers may require an additional licence. But we can speak about that offline and go through that list of providers with you.
Tim: It is typically a unique combination for each organisation. The main levers are: Emissions contribution (high emitters vs low emitters etc), Maturity (eg: are they on the CDP and/or SBTi disclosure and target journey) plus your relationship with the supplier (strategic, tactical, influence levels etc). This forms the basis for the right action programmes for the right segmentation
Part of our work with our clients is answering that question, helping them to identify where to start and which suppliers to move forward with. I think it’s part of, as Soizic talked about, that streaming. Putting them into different groups so, if you think about it, there’s sort of different ways of looking at it.
First of all, obviously your highest emitters. Where are the big lumps of carbon in your supply chain? Using capabilities around estimation to understand that, engaging those suppliers to really start drilling into it and start getting a good perspective on it and what you can do.
Now, some of these suppliers, you know, let's say Google, for example. I don't think any of our clients can influence what Google strategies are. But the good news is, they do have very impressive climate programmes and emissions transparency and you can tap into that. So there are going to be groups of suppliers that you can influence, groups of suppliers that you can't. I think you'll be amazed, actually, the number of suppliers that are looking for help and advice and looking for direction. And also then as we talked about, the outcome of that is those incentives. So which are those suppliers that are really going to help drive additional value and how can you work with them to move the needle on carbon? So it's a bunch of things, but it's about thinking where you can make the most impact.
Coming back to that point at the beginning, you guys don’t have big teams. So what we see is our clients are really doing a large amount of measuring. You know, they're bringing in thousands of suppliers into Vizibl to actually measure. But then in terms of it's a smaller subset that you're actually going to act with. And in rare cases we've seen numbers around the 80/20 pareto principle, you know, 20% of your suppliers will cover 80% of your emissions.
Well, the most common scenario with the projects we've seen are down to 5%, 95%. So 5% of their suppliers are creating 95% of their emissions. So that's easier, they’re the 5% that you kick off with. So if you can think about that for 2024, get those suppliers in, map them out, get the heat maps in place so you can understand where you focus and then challenge yourselves to say, okay, what percentage, what number of those suppliers can we hit next year? What can we engage with? Do we have kickoff events? Do we start educating those low maturity ones? But we really start engaging the ones that we really want to make an impact with.
One final example. One of our clients has a move over the next ten years to move from fossil fuels to hydrogen in their manufacturing supply chain. That's not easy. That is a very complex process. So they're prioritising those suppliers, the existing suppliers they work with have got a hydrogen roadmap, but also they're innovating to look for those new suppliers that they haven't found yet, that they're going to need over the next 5 to 10 years as they really transform their categories.
Sarah: So we match on company name, domain, ISIN numbers, DUNS numbers. There's a variety of different ways that we match to make sure that we're getting the right supplier. We can take you through that separately and take you through a validation exercise to make sure that we've not not only cleansed, normalised, enriched, but we've mapped and loaded the right supplier against the right numbers.
Sarah: It's complex but yes! Not going to answer that in full but we can take you through the specific details. Please reach out to the Vizibl team to discuss in more detail.
Sarah: We've got a library of content that we've curated and put together and we can help with the education and alignment process. We partner with and try to recommend that you do use industry standards aligned to UN SDGs, greenhouse gas protocol, wherever it's possible to run. We’re happy to run through some of those with you separately.
Tim: My perspective on that is that suppliers sometimes get a bit twitchy about integrating into their systems. But absolutely, what we're doing is we're receiving data uploads from those suppliers. So the suppliers themselves can upload into Vizibl for you. The key thing is obviously you may want to put that into a staging area and check it first. So we can absolutely do that as a core functionality piece within Vizibl. So the supplier can upload it and one of your analysts can take a look at it and check that it makes sense before you upload, publish it and start using it. So that's probably the simplest way of getting data from those suppliers.
Tim: It's going to be critical, because you're going to have your day to day activities with those suppliers. You're going to be working with them on their renewable energy strategies, on their travel policies, all that good stuff, the low hanging fruit. But you are going to hit categories, services and products that you buy that are not going to be able to decarbonise fast enough.
You're also going to hit challenges and issues within your own organisation that your suppliers will have solved for other clients. So if you think about it, your role then is to understand how to work with your stakeholders to identify the problem that you're trying to solve. There's a real art in generating good problem statements. Once you've got a good problem statement, share that with your suppliers.
Run innovation challenges, share them with existing suppliers, academic bodies, and also potentially share it and publish it out with new suppliers. We've got a number of clients that are currently running open innovation programmes using Vizibl so that a prospective new supplier can do a very light registration in Vizibl, submit their idea, and then you can track it, manage it, review it, score it, and decide whether you want to take it forward.
The key thing is you've got to be able to enable the supplier to see what's happened to that proposal idea. And don't be one of those organisations that becomes a black hole for innovation where suppliers send in ideas and they never get any response. Using Vizibl, you can and should share your feedback with them. If it's great, move forward with it; if not, give them feedback into why not. That way you'll be a lot more attractive and you'll continue to get the best ideas from your suppliers.
Vizibl works in partnership with a number of carbon calculation companies, including DitchCarbon , Emitwise and CTRL+S plus others to transform your spend data into actionable data, at the supplier level.
Our professional services team are on hand to guide the client step by step through the SBTi supplier engagement framework and how it works in the Vizibl app. A lot of the ‘heavy lifting’ - supplier surveys, broadcast communications and content sharing for capability uplift in your suppliers - is handled directly in the application.
We offer Vizibl’s Supplier Collaboration & Innovation platform on a modular, programme or enterprise level basis. The way our customers start will depend on their immediate needs. For instance, our ‘Decarbonisation as a Service’ offering has been built to rapidly accelerate your supplier engagement for decarbonisation efforts, and enjoys access to all Vizibl modules - Supplier Relationship Management, Supplier Innovation Hub, Supplier Sustainability Management and Supplier Collaboration Workspace, for a lower entry price.
As programmes mature, or the organisational needs expand outside of supplier decarbonisation, customers can then extend programmes across a wider sustainability remit - water, biodiversity, human rights for instance. We additionally offer programmes around supplier resilience, transformation and growth, leveraging the full power of the Vizibl application.
This is a complicated question and there is not one answer that fits all. It really depends on the type, size, emissions contribution, and maturity of the supplier. Large suppliers, such as Google used in the instance above, already have a mature programme in place on their sustainability journey. Smaller suppliers may be less mature, but equally, contribute less to your overall scope 3 emissions. Part of the segmentation work that Vizibl supports is helping you to understand not only who are the main contributors to your scope 3 emissions, but what is your level of ability to influence that particular supplier.
The next step in the journey is then working out how to incentivize your suppliers to join you in your mutual sustainability journey. Gartner’s recently published paper covers more on this very subject, and you can get complimentary access (for a limited time) here.
Finally, sustainable products don’t always equate to more expensive products, or suppliers taking hits on margins. The critical question a buying organisation has to answer in this conundrum is; how long are you prepared to buy unsustainable products for, and are you prepared for the fact that you will likely have to pay more (potentially more than current day price) anyway when you no longer have the choice? Engaging early with suppliers is the best long term strategy to secure your relationship, your supply, and your price.
