As sustainability becomes a more deep-rooted and active part of day-to-day business decision making, companies are increasingly moving towards a single, integrated platform to manage EHS, sustainability and supply chain data.
Companies worldwide are working to improve their sustainability and environmental, health and safety (EHS) performance and accurate data management has become a crucial and rapidly growing business requirement. Investment in data management systems is one the fastest growing areas of many companies’ EHS and sustainability spending. At the same time, companies are looking for increased visibility on their suppliers’ performance and are investing in additional monitoring. The apparel industry is leading the way, followed increasingly by the food industry. Moreover, companies are beginning to tackle energy management in a more granular way, favoring automation and smart meters coupled with scenario planning.
The information revolution has resulted in an enormous amount of data, some of it useful and some of it not. Amidst this noise, how can a company best determine which data matter and how to use that information for better business results?
With advances in connectivity and the power of technology to gather data, we have more information at our fingertips than ever before. According to IBM, there will be 300 times more information available to use by 2020 than there was in 2005 – a figure it puts at 43 trillion gigabytes of data. Corporate sustainability managers are beginning to realize the benefits that information can have in supporting their environmental and social impact reduction efforts. Typically, a company’s largest impact on the planet sits outside its sphere of influence, along its supply chain. It is not uncommon for more than 80 percent of a company’s total end-to-end carbon impact to be situated within the operations of its suppliers – and for its direct operational impacts to account for as little as 5 percent in many instances.
For these big businesses, supply chains are large and complex, made up of tens of thousands of suppliers across the world spending hundreds of millions of dollars. Understanding who those suppliers are and what impact they are having on the planet is crucially important if the company is to reduce its overall environmental impact.
But it’s not easy. In fact, without the right data and information on those suppliers, it’s very difficult indeed.
Companies have only just started to scratch the surface in understanding how they can gather, process, analyze, and make the best use of data that will help them save money, make money, build more resilient supply chains, and ultimately become more sustainable.
More organizations are turning to software providers to help them come to grips with the data that will help to unlock these savings. For example, the UK-based hotel and restaurant group Whitbread has been working with UL EHS Sustainability’s supply chain software solution to help meet ambitious new sustainability targets. In May 2015, the company reassessed its CSR goals and developed responsible sourcing and commodity policies to ensure that by 2020, all of its suppliers improve their sustainability credentials and meet the standards set by the business.
The agile technology offers a centralized way to collate and manage data, and report on the sustainability performance of suppliers. By inviting suppliers to answer a series of questions, the software can automatically analyze the responses and identify potential risks within the supply chain. Now, with a bird’s-eye view of its supply chain hotspots, Whitbread’s sustainability team has access to clear and consistent information that allows them to work closely with suppliers to resolve issues and to educate them about the company’s sourcing and commodity standards.
Of course, the software can also be used to encourage environmental impact reduction by asking suppliers to log carbon, energy, waste, and water data – and identifying areas where improvements and savings could be made. A sophisticated EHS and sustainability management system allows you to collect all sorts of information – from incident management to code of conduct surveys to performance metrics for Scope 3 carbon reporting.
The use of data is also enabling companies to improve transparency. Consumer attitudes towards supply chain issues, such as working conditions and forced labor, have changed. As with food that ends up on our plates, more people are interested in where their clothes and other consumer goods are coming from – and they want companies to be more transparent in providing that information.
Companies are realizing that having a full picture of their supply base, backed up by data that points to potential risk, will stand up to this increased scrutiny by consumers and the media – and help to protect valuable corporate reputation.
The practice of corporate sustainability and the use of advanced analytics have not always been perfect bedfellows. In the past, corporate responsibility professionals have been far happier to operate in the creative world of communicating via PowerPoint than to bury their heads in Excel documents and big, complex data.
But the landscape is changing. Complex environmental and social challenges are increasing all the time, particularly with supply chains located in parts of the world most at risk from issues such as climate change and water scarcity. As data management software gets more and more sophisticated, it aids performance management and strategic decision-making, rather than just pure reporting. This new knowledge is giving companies the power to effect positive change along the value chain.