Improving your supply chain’s environmental and social impact starts with something that sounds simple enough: understanding where your products are coming from. The modern supply chain, however, can prove challenging to stay on top of. Knowing which facilities, processes or materials in your value chain are contributing most to your footprint means taking a rigorous approach to collecting data at every level, and using the right technology to analyze that information and take action.
Making meaningful shifts is about identifying the areas where you and your suppliers stand to benefit the most from focused intervention. You’ll also need to have clarity on the concrete solutions you can implement to mitigate risks or impact. And though every supply chain is different, there are some common best practices to keep in mind for any business looking to audit their operations and find room to improve. Let’s start with the four below.
Establish top priorities
Each factory, partner, or process in your supply chain is worth assessing for ways to improve. But you’ll want to start targeted intervention by focusing on the most pressing issues you need to tackle. Since each business has its own goals and priorities, your materiality assessment should take into account a few broader concerns:
- Regulatory concerns: Which standards, compact or regulations dictate how your industry operates? What are the expectations — or essential requirements — your supply chain needs to fulfill to operate legally or ethically? Worldly was originally built around the methodologies and approaches set forth by industry leaders in the Sustainable Apparel Coalition.
- KPIs and hotspots: What are the links in your value chain that produce the heaviest footprint in terms of factors like emissions, water use, or labor? Which metrics are most central to how you’ll gauge success?
- Investment: Where can the most impact be achieved based on your spend? Are there alternative materials or processes you or your partners could explore that can be implemented at a similar price point to existing ones?
- Savings: Having drilled down to find the hotspots in your value chain, which improvements can you make that are likely to yield the greatest cost savings — either immediate, by finding cost-efficient alternatives, or in the future, by eliminating risk or regulatory roadblocks?
Communicate with suppliers at every level
Achieving that level of precision in your view means making sure your data collection is standardized, consistent and detailed. And while your company, or even your primary suppliers, may be committed to reducing impact, you’ll need the proper structure and practices in place to make sure that commitment is shared.
A 2020 report from the Harvard Business Review notes that while plenty of corporations pledge to build sustainability or social responsibility into their supply chain, most struggle to ensure the same level of commitment from third-party suppliers. Per HBR, “the reality is that their suppliers — especially those at low levels of the chain—often violate sustainability standards, exposing [corporations] to serious financial and social risks.”
To avoid that kind of liability, and to make sure you’re able to follow through on your commitments, you’ll want to keep these strategy points in mind:
- Shared standards: Work towards a shared vision for sustainability by making it easy for suppliers to adopt common frameworks and align on key metrics for success.
- Streamlined reporting: Make reporting simple for suppliers with standardized self-assessments, which can reduce audit fatigue and make it easier to onboard your manufacturers.
- Direct contact with second or third-tier suppliers, or with procurement people at first-tier suppliers, can help disseminate best practices faster.
Build data assurance into your process with verification
Gathering reliable data means going beyond self-reported information from suppliers. To comply with regulations, and ensure compliance your data must be vetted and verified. For brands, having an independent party to do the assessment is important.
The benefits of verifiable data benefit both brands and suppliers. Credible verification means you can be confident the numbers will add up when you’re submitting data across different frameworks, like CDP and GRI, and manufacturers are able to offer peace of mind to prospects and brand partners for ongoing business relationships.
Verifiers should have education in an environmental and social related field, be well informed of environmental law and regulation, and have experience in interviewing and assessing data in factory settings. With Worldly, verification is built into our platform to ensure compliance through our partnership with SGS, the world’s leading testing, inspection, and certification company.
Find the right tech to enable big shifts
While each of the strategies we’ve outlined might present their own challenges, there’s one element that can help make your job easier across the board: finding the right technology. Well-designed, industry-specific software can help make each step in the process easier:, increasing transparency, enabling communication and reporting, and providing insights to fuel meaningful shifts toward sustainability.
Here are a few ways Worldly can help you understand your supply chain and make impactful interventions:
- Trusted assessments: Standardize your suppliers’ reporting with the most widely-used self-assessments in the apparel industry, like the Higg Facility Environmental Module (FEM), Facility Social and Labor Module (FSLM), and Brand and Retailer Module (BRM).
- A basis for comparison: Compare your supply chain’ performance across environmental and social impacts, using the world’s largest dataset on facilities, including the textile and apparel industries.
- Unparalleled intelligence: Our powerful analytics tools are designed to help you spend less time deciphering data and more time identifying hotspots where you can improve.
- Single-source: Visualize your entire supply chain, collect and analyze data, mitigate risks and monitor progress, all from the same dashboard.
- Sustainability at scale: Build responsibility into your operations on a global scale, with tools that can be easily adopted by suppliers at every level.
As you take steps toward a more sustainable supply chain, we want to help you keep moving in the right direction.