Why do I need a new platform for my ESG reporting?

04 Oct 2023
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James Butcher
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Most companies have a whole raft of different systems - ERP, PIM, PLM, and RFx to name a few. And with the demand for greater insight around ESG metrics (social, environmental, carbon emissions/Scope 3) do you really need a new platform or system for reporting? 

It’s not an unreasonable question to ask, but at the risk of sounding too much like a consultant: it depends.

It is certainly the right question to ask, but the problem for many is that the reporting and data collection requirements are not yet well defined.

For reporting, the systems may well exist but the biggest challenge for most is how to get the information in the first place given the evolving requirements from green chemistry (e.g. PFAS, conflict minerals etc.) to human rights, to sustainable packaging and supply chain decarbonisation. 

I have little doubt that in the decades to come information such as carbon footprint or material types will be as ubiquitous as a GTIN/barcode is today or standardised in the same way nutritional declaration is today. 

But we are years, if not potentially decades, away from that point in time. If you have a very clear requirement such as understanding the post-consumer-recycled (PCR) content in the plastic bottle you sell, this should at some point become an attribute in your ERP or PLM (specification) system. The problem is that currently it is so dynamic, and many suppliers cannot even be sure from batch to batch.

Making it far too soon for this to be considered a standard product attribute. Indeed, the first questions you ask of a supplier may be more qualitative than quantitative. Understanding where suppliers are on their journey. 

For example, the first step in an engagement campaign is often to gauge supplier readiness and benchmark them where they are against an objective. In the PCR example, it could simply be whether the PCR content is: 0%, <10%, 10-20%, 20-30%, >30% or unsure.

'Unsure' is an important qualitative answer, because it helps to understand where capability building is required within your supply chain. The banding is easier to answer and sufficient for most change programs (and often for EPR reporting etc.).

Whilst instinctively ‘unsure’ is an uncomfortable answer for the supplier to provide, it is important for them to know they can do so without consequence. Essential if you want maximum supplier engagement in the transformation process and informing change.

Other questions would be ‘change’ questions. E.g. "Do you have a plan to achieve [X%] by [Date]?" If so, when? If not, what are the barriers? Again, this helps to inform change. The same is true for supply-chain (Scope 3) emissions. "Do you know your emissions or relevant emissions factors? Do you even know what an emission factor is?"

These questions are all part of the change process to produce more sustainable products, develop more sustainable packaging and drive supply chain decarbonisation. But they are change questions and about the right TTI (Targets-To-Improve). They are not at this point business-as-usual (BAU) product or material attributes.

At the point standards evolve and supplier literacy reaches the right level these BAU attributes will be within your standard specification system. In the meantime, there is the need for ad hoc data collection and transformation, which is why specific solutions such as The Supply Pilot Platform exist. 

It is also the reason Supply Pilot provides both short-term project-based solutions and a longer-term platform to engage suppliers and collect data (qualitative and quantitative). Developed not to replace your existing enterprise systems, but designed specifically to complement them.

The Supply Pilot Platform also allows for rapid data collection exercises – from hundreds of suppliers and thousands of products/materials. When questions arise around collecting information - such as a requirement for new information, you are unlikely to want to update every single specification with the approval overhead. 

You do need to collect the information, and now. To assess the commercial risk, gauge supplier readiness, and inform reporting and action plans. Examples of such are the EPR legislation for packaging, responsible sourcing for cotton and new rules on ‘green chemistry’ such as the increasing bans on PFAS.

In time these will become BAU and will reside in the right PLM or ERP system, but as we’ve seen with more established issues such as RSPO (Palm Oil) it can be years before it becomes BAU. In the meantime, agile and issue-agnostic platforms are an essential part of the toolbox to accurately report and drive sustainable transformation. 

Supply Pilot partners with companies such as Aevitas IT so that information once collected can be used to update enterprise systems. Learn more about our partnership here



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