The other day, we learned that 150 European major company executives had written an open letter to the EU saying that they want stricter requirements for reduced greenhouse gas emissions. Several Swedish companies are among the 150, including Electrolux, H&M, Stora Enso, SSAB and Volvo. This is also the kind of message we hear when talking to purchasing and sustainability managers at large Swedish companies. Ambitious and absolutely necessary if we are to achieve the objectives of the Paris Agreement.
But we also meet the engine in business: the small and medium-sized companies that are busy supplying the big companies with goods and services. They also hear about the visions and an increasing number of them are starting to get demands from their customers to report their sustainability work and progress. It takes a lot of time and effort, but of course they want to live up to the demands of their customers.
It must pay off to be sustainable
The strange thing is that they rarely get any feedback on submitted answers and the most sad thing is that their commitments rarely pay off when the same customers procure products and services. Then it is almost exclusively a question of price. There is a clear gap here.
We talked about this with a large food company this week and it became clear that the ambitious sustainability goals have not reached the purchasing departments. The incentives for individual purchasers are still linked to price. The trend is clear in several large companies in a wide range of industries. One purchasing manager described to us that although they have started to ask their suppliers for data, they don’t dare to take any action if a supplier doesn’t fill the requirements. How come? The answer is simply that they are afraid of losing suppliers.
Two calls to big business
We clearly understand that this is a journey, but we have two clear appeals to large companies with high sustainability goals:
- Feel free to set sustainability requirements on suppliers, but only if you intend to reward the companies that live up to the requirements.
- Bring the suppliers on the journey! Tell them what’s going on, what the requirements will be and what it takes for them to live up to them.
Then we will see change; only then can we bridge the gap between vision and work.
