- Benefit from a greener supply chain
- Start by working out your supplier emissions
- Set goals and get internal buy-in
- Establish a supplier code of conduct
- Ask suppliers about lower carbon options
- Join a buying group to procure green products
- Find local business grants and schemes
Investing in more sustainable supply chains can boost your appeal to customers, shareholders and potential investors.
This is because greener supply chains:
- can lead to growth and cost saving opportunities
- can enhance your business reputation
- help ensure future regulatory compliance
- can improve continuity of supply
- reduce your exposure to fossil fuel price volatility
According to a 2019 study, 85% of consumers are more likely to buy from a business with a reputation for sustainability than from a neutral company, assuming their prices were equal.
Carbon Trust estimates that supply chains are responsible for 65 to 95% of most companies’ carbon emissions.
To reduce these you need to consider what happens before and after your business provides a service or makes a product.
This includes the supplier emissions produced by:
- creating the raw materials you use
- manufacturing the products you sell
- transporting materials and products to your business
- delivering what you sell to customers
- disposing of waste from your business activities
To reduce these emissions you first need to measure them. This will provide a baseline to compare against once you take action.
If you can’t measure specific emissions data, simply rank your suppliers by overall spend to help prioritise your efforts.
Ask your suppliers for emission data
Some suppliers already know the carbon emissions created by their products and services. This may be tracked internally within their business or verified by an outside source.
There are product certifications available that can verify the amount of carbon associated with an organisation or specific product.
Ask your supplier for any emission-related data they have, or if it’s possible for them to calculate it.
If this is not available, ask your supplier for raw data on energy inputs, such as how much fuel is used transporting their products to your business and what type of energy they use (renewables or fossil fuel).
Calculate supplier emissions yourself
If your suppliers do not have their own data, it is possible to calculate yourself based on the raw materials and processes they use.
For many sectors there is industry average data you can use to get an idea of how much emissions are associated with a product or service.
To get started you will need an idea of the rough amount of materials and resources involved in what you purchase.
Each one has a ‘conversion factor’ that will help estimate the emissions associated with that material. There are pre-made spreadsheets and free software tools to assist.
Before engaging with external suppliers it’s important to get internal agreement on your emission reduction programme.
You need to define the boundaries of your programme and who will run it.
- assigning responsibility with a job role or team
- deciding what service or product categories to start with
- working out the metrics you’ll measure and how to collect them
- getting support from senior management
- how supply chain efforts fit with your larger sustainability goals
It can be helpful to set written standards for your suppliers, products and services.
These can form part of your business strategy. Post them internally or on your business website if relevant to the public.
Areas to focus on include:
- reducing energy or fuel consumption per unit of production
- optimising logistics and low carbon transport
- minimising waste generated in production
- improving recycling practices and products
This helps you to partner with suppliers that share the same values and goals where possible.
Before sending surveys or requests for data, let your suppliers know about your programme and why it’s important.
- the person or team responsible on your end
- how you will use and protect their data
- the survey schedule and how often you’ll be in touch
- what you can do to assist them in responding
- consequences of not participating
If you have set targets and milestones, communicate them with your suppliers. If suppliers can see the timeline and expectations of them going forwards it enables them to make a long term reduction plan as well.
Depending on the size of your business and number of suppliers, consider a training or information session to explain your programme and the survey process.
Prioritise your largest suppliers or those that might have the most room for improvement in their green credentials.
When you send out supplier surveys, consider:
- making it a web form so it’s easier to complete
- how you will ensure the quality of the data received
- how you will enter data into your record keeping system
- when to follow up with questions or next steps
It is important to stay in regular contact with your suppliers to build your programme. It will take consistent efforts to build your data set.
It can be helpful to work together with other businesses to buy green products.
This increases your purchasing power and can help influence suppliers to change their practices.
The British Independent Retailers Association (BIRA) runs a buying group that helps members get better deals from suppliers.
Use our finance and support page to find green business grant programmes in your region.
Some are designed to help SMEs with selling or developing greener products.
They can also offer:
- grants with no payback requirement
- matching funds up to a total amount or percentage of costs
- loans with low or no interest
- free expertise for energy assessments
Funding is dependent on the size of your business and where it’s located.
You can also use GOV.UK’s fund listing service to find programmes that apply to your business.