Building Resilient Supply Chains: Getting the Most out of Supplier Engagement

The document outlines a seven-tip framework for companies to engage suppliers in climate action, emphasizing cross-functional collaboration between procurement and sustainability teams. It argues that climate change is a primary driver of supply chain disruption and that engaging suppliers—particularly high-impact ones—through target-setting, capacity building, and financial incentives can reduce financial risks and improve competitive advantage. The guide provides specific recommendations on prioritizing suppliers based on emissions impact and readiness, as well as methods for collecting data and incentivizing decarbonization.

• Climate change significantly disrupts supply chains through direct impacts like extreme weather events and indirect drivers such as geopolitical unrest and regulatory uncertainty. An estimated US $162 billion in potential financial costs are linked to climate-related risks in supply chains, yet only 30% of companies surveyed by CDP in 2023 recognized these upstream risks.
• Effective supplier engagement requires a cross-functional approach where sustainability teams provide technical expertise on risk and requirements, while procurement teams leverage their existing supplier relationship management (SRM) processes to reach suppliers and integrate climate goals into procurement workflows.
• Companies are advised to set a "north star" supplier engagement goal with measurable KPIs, such as the percentage of suppliers with validated targets or emissions intensity. Analysis indicates that emissions hotspots often exist beyond Tier 1 suppliers, suggesting that engagement should extend further upstream in the value chain.
• The guide recommends a tiered approach to target-setting: starting with scope 1 and 2 emissions calculations, moving to near-term targets (typically 5-10 years), and eventually progressing to long-term net-zero targets. For smaller suppliers, non-emissions-based targets may be simpler to track initially.
• Suppliers should be prioritized for hands-on support based on a matrix of potential impact (e.g., emissions contribution, spend, or criticality of materials) and readiness (e.g., existing sustainability reporting or industry pressure). High-impact, low-readiness suppliers are identified as a key priority for capacity building.
• Financial and collaborative incentives are more effective than training alone; suppliers are 52% more likely to reduce annual emissions when buyers offer financial incentives. The most powerful driver for setting science-based targets is joint investment in R&D for low-carbon technologies (4.3x more likely), followed by supplier award schemes (3.2x more likely).

APA

We Mean Business Coalition (2025). Building Resilient Supply Chains: Getting the Most out of Supplier Engagement. https://www.wemeanbusinesscoalition.org/wp-content/uploads/2025/04/Supplier-Cascade-Guidance-14-04-25-FINAL.pdf

Chicago

We Mean Business Coalition. Building Resilient Supply Chains: Getting the Most out of Supplier Engagement. 2025. https://www.wemeanbusinesscoalition.org/wp-content/uploads/2025/04/Supplier-Cascade-Guidance-14-04-25-FINAL.pdf.

Wikipedia

{{cite report |author=We Mean Business Coalition |title=Building Resilient Supply Chains: Getting the Most out of Supplier Engagement |date=April 2025 |url=https://www.wemeanbusinesscoalition.org/wp-content/uploads/2025/04/Supplier-Cascade-Guidance-14-04-25-FINAL.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{wemeanbusinesscoalition2025building, author = {{We Mean Business Coalition}}, title = {{Building Resilient Supply Chains: Getting the Most out of Supplier Engagement}}, institution = {We Mean Business Coalition}, year = {2025}, month = apr, url = {https://www.wemeanbusinesscoalition.org/wp-content/uploads/2025/04/Supplier-Cascade-Guidance-14-04-25-FINAL.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }