THE NEED 

The last few years have seen an increase in demand of corporate social responsibility, i.e. the idea that a business has a responsibility both towards the society as well as the environment in which it operates. This idea has been synthetized in the acronym ESG – Environment, Social, Governance – criteria tied also with that of Responsible Investment. 

In industrial B2B, the level of ESG Sustainability of a company is given not just by the company’s actions, but on those of its Supply Chain as well. In fact, ESG Sustainability in industrial B2B can represent up to 80% of an organization’s revenues, while the financial system is increasingly driven by ESG criteria.

Although there exist several ESG international standards and industry-neutral solutions, not all Sustainability issues matter equally to each industry. The same Sustainability issue can manifest differently in the Supply Chain of industrial B2B and it is important to create and use a tool able to monitor and, possibly, improve every issue at stake.

Moreover, industrial Supply Chains are often characterized by a great presence of SMEs, spread all over the world and with several layers of Sub-Vendors (system integrators, foundries, raw materials, …) of their own, a characteristic which requires continuous Supplier engagement, needed to provide constantly updated ESG information.

 

A COLLABORATIVE SOLUTION

In July 2019, ANIMP – an Association of international EPC Contractors, components manufacturers and service providers – created an open and industry-wide workgroup to tackle the above-mentioned issues and create industry-shared ESG Guidelines for the Industrial Supply Chain. 

The working group – first-of-its-kind – saw the cooperation of several co-innovators and released a first edition of the Guidelines in February 2020, after months of discussion, consideration and research. 

The following month welcomed the deployment of the Guidelines on SupplHi’s innovative platform for the Management of Vendors for industrial equipment and services, which allowed the integration of a dedicated ESG module and the collection of data both from Vendors with profiles already existing on the platform as well as with new Vendors, invited to take part to the project.

2021 has seen major development of the Guidelines: in March, the workgroup conducted the first calibration of the Guidelines based on data collected from over 1.000 Vendors from all over the world. This data allowed the first-ever calculation of vendors’ ESG scores according to the industry-shared ESG Guidelines and this in turn opened the road to changing from a monitoring-focused model to one centered on “sharing feedback and rewards” to stimulate constant improvement and ensure compliance with the latest regulations. 

June 2021 saw the launch of the industry-wide open program called “ESG Supply Chain Guidelines”.

 

AN EVER-IMPROVING OUTCOME

The launch of this website is a first step in the sharing of the ESG Guidelines for the Industrial Supply Chain, yet it is far from being the final one. 

The Working Group of co-innovators came together with one common goal in mind: 

“To define the set of information and metrics to collaboratively assess and monitor the performance in terms of Environmental, Social and Governance (ESG) Sustainability of B2B industrial Supply Chains, while raising the level of awareness on initiatives that increase the Sustainability performance of players across all the layers of the Supply Chain”

And in order for this objective to be achieved, there can be no “final” version of the Guidelines. It is our shared agreement that the Guidelines will keep on evolving according to the latest regulation and compliance requirements, so as not to become a static document, but rather an ever-improving manual that the entire industry can use to assess, monitor and take improvement actions on its entire supply chain.