As the first Corporate Sustainability Reporting Directive (CSRD) reporting period approaches, companies around the world are focused on developing and implementing their internal organizational sustainability data collection process and systems.
While it is critical that companies focus on standing up these strong internal processes to set them up future reporting success, they must also remember to focus efforts on supply chain management – engaging with and measuring emissions from the suppliers and third-party organizations they work and partner with.
This blog will explore the importance of supply chain management in achieving compliance, the key components involved, the challenges organizations face, and how software solutions can support these efforts.
The Importance of Supply Chain Sustainability
An EY 2022 report explains that a focus on supply chains is vital, as more than 90% of an organization’s emissions and 50-70% of its operating costs are contributed by their supply chains.
The CSRD emphasizes that a supply chain management strategy is not just important, but critical for ensuring compliance and precise, accurate and holistic reporting data. In fact, a key part of the disclosure to the CSRD regulation is conducting specific reporting on supply chain activities, both upstream and downstream, and their associated impacts.
Key Components of Supply Chain Management
Supply chain management can involve different components, including data collection, performance monitoring, impact analysis, risk management, auditing, and more. A critical part in gathering this information is having a strong engagement strategy. This includes ways to connect with suppliers, onboard them appropriately, ensure compliance and monitor risks.
Challenges in Supply Chain Management
Managing and engaging with your supply chain can be a daunting task. Especially without a centralized management and tracking tool to gather and store the information. Conducting efforts and gathering data through manual processes can prove to be cumbersome, resulting in increased risks of errors and a lack of standardization.
Companies with complex supply chains can also find it difficult to gather data across their operations. This difficulty is particularly due to the added layer of mandatory regulatory compliance that is based on regions.
How Software Supports Supply Chain Sustainability
Supply chain sustainability software helps organizations improve transparency, manage risks, and engage with suppliers to enhance a company’s sustainability performance.
Integrating software can help organizations to collect supplier data, monitor performance in real-time, and track any key risks and areas of opportunity. Specific solutions make it easy to establish two-way communication channels with suppliers through engagement and direct messaging tools. Companies will also be able to increase their workflow efficiencies through automated reporting tools embedded in the software, which make it easy to generate consistent reports that are shareable to stakeholders.
Cority’s Supply Chain Sustainability solution
Cority’s market-proven, purpose-built Supply Chain Sustainability solution enables companies to consolidate and align supplier management with sustainability and ESG goals in one secure, user-friendly platform.
Through our software solution, companies can leverage best-in-class features, including built-in calculation wizards, which help to automate reporting of emissions using over fifty Scope 3 calculation methods in the GHG Protocol. Companies can also identify risks and support immediate interventions across the value chain with configurable alerts, automated action plans, and two-way communication channels. And, Cority’s supply chain solution seamlessly integrates with its Sustainability Performance Management solution, providing a holistic, real-time view of a business’ supply chain emissions. This integration simplifies monitoring progress and reporting for key regulations.
Ready to start or scale your supply chain reporting efforts? Reach out to our experts today.
