Around the world, different regions are pulling in different directions when it comes to environmental, social, and governance (ESG). Brands in Europe are well aware of EU regulations targeting a more sustainable supply chain, with policies covering everything from carbon footprint and deforestation to forced labor. UK regulators have largely followed suit, while Canada has laid out important frameworks for environmental reporting.

The US, by contrast, has moved slowly, at least at the federal level. With ESG becoming something of a political football, US regulators may not move as quickly as their counterparts across the pond. And yet, many American brands and manufacturers still have sustainability on their minds.

Consumers go green

The global reality is that consumers, not regulators, are driving the sustainability conversation. The desire for products that align with consumer concerns on labor conditions and the environment is a concern for consumers in the US as well, in ways that don’t always line up cleanly with red and blue state stereotypes. One national study this year found that 80% of consumers are concerned about the environmental impact of the products they buy, up from 68% in 2023. And the trend seems set to accelerate alongside generational change. In a Business of Sustainability Index report, 80% of consumers aged 18 to 34 said they would pay more for sustainable products.

With retailers reflecting consumer preferences, sustainability is emerging as a competitive factor as well. But there’s a catch: most of the environmental impact of a brand’s products happens in the upstream supply chain. Sustainable products require a sustainable supply chain, making environmental factors an important consideration in supplier selection and approval.

Let’s look at three areas where brands and manufacturers can put systematic processes in place to evaluate supplier performance, helping ensure they’re choosing the right supplier partners going forward.

1. Supplier footprint

Your suppliers run businesses just like you do, with facilities, operations and logistics chains of their own. It’s increasingly possible to quantify the net environmental impact of supplier operations in terms of greenhouse gas emissions, carbon footprint, and other factors, and to evaluate the maturity of potential suppliers in terms of their efforts to reduce emissions. However, doing this on an ad hoc basis isn’t the right approach.

Procurement and quality teams are often under pressure to move quickly, so standardization and repeatability are important. ESG compliance standards and policies can exist alongside, and ultimately be complementary, to processes such as your foreign supplier verification program. Thinking of the collection and evaluation of supplier emissions data as an intrinsic part of supplier approval can simplify the process overall.

2. Initiative and audit participation

There are sustainability initiatives underway around the world, with a variety of audit and certification bodies supporting them. A supplier’s participation in programs like the Science Based Targets Initiative (SBTI), in which businesses set greenhouse gas reduction targets backed by a rigorous program of testing and verification, can be useful in understanding a supplier’s level of commitment to sustainability. Participation involves a substantial commitment and says something about a partner’s ability to support your long-term sustainability goals. Making initiative participation a factor in supplier evaluation and approval can be a straightforward way of ensuring that future partners are serious about sustainability over the long term.

3. Product Lifecycle Analysis (LCA)

Evaluating your environmental impact requires more than engagement with individual suppliers, and a decision to reduce impacts in one area can have unintended consequences if total impacts aren’t well understood. Sustainable sourcing ultimately requires the ability to evaluate ingredients and products from the point of origin right down to disposal. That can seem daunting, but it’s important to understand that Lifecycle Analytics tools exist to help you estimate total product inputs even without comprehensive data collection in place. Beginning the LCA journey now and plugging in improved data over time can give you a meaningful head start over less diligent competitors.  

TraceGains Sustainability Management

For years, TraceGains has helped brands and manufacturers build strong supplier relationships with the industry’s leading document and data management tool set. Sustainability is the next frontier in supplier management, and we’re there already. Configurable dashboards and data management tools are enriched with best-in-class partner data. Sustained provides best-in-class Lifecycle Analytics capabilities and access to rich environmental and carbon metrics. Meanwhile, DitchCarbon is the leader in supplier impact data for greenhouse gas emissions and carbon data, providing powerful scoring metrics to help you build a sustainable supply chain for the long term.

Reach out to learn more.