What’s the Key to Reaching Net Zero? Data Collection

While COP28 signals another year closer to the 2050 Paris Agreement, the latest Stocktake reveals the world’s biggest brands are delivering their net zero pledges too slowly.

To show progress, they must improve the strategies behind their targets, and to do this, they need reliable supplier data.

Securing it, however, is easier said than done.

It will require brands to think differently about how they work with suppliers, in particular, how they engage suppliers and show them value.

The way forward is to borrow an idea from elsewhere in the business.

In marketing, we treat customers in a way that encourages them to buy from us. This principle of encouragement is tried and tested, and it would greatly benefit relationships with suppliers.

Misaligned Expectations

Many of today’s big brands manage suppliers using procurement technology. The problem is that the tech environments are often too complex, making the tools hard to use.

This means that suppliers struggle to provide this crucial information needed for net zero. So, brands end up with expensive tools that don’t yield the results they need.

Further, we’re seeing a misalignment in expectations between brands and their suppliers. At first, suppliers have a strong incentive to work with a brand. What they want is to receive a purchase order, deliver their first service or product, and get paid – and after that, they care about transacting and renewing business. This is how they like to work.

However, the way brands need to work with suppliers requires more complexity. Beyond the transaction, they need a large amount of information for a range of purposes, from compliance and quality to performance, tax, and managing their carbon footprints.

They also want to be efficient, which attracts digital change – such as extensions to established technology or advanced specialist tools – and these changes mean fresh ways of working.

Suppliers are now expected to respond to a flood of information requests when they simply want to work and get paid. In addition, the technology landscapes and systems with which they work, are complex and evolving. This is causing them, what we call, ‘initiative fatigue.’

Considering that brands must get data from suppliers if they are to reach climate goals, it’s time to address how the two parties engage.

Lessons from Marketing

In order to receive crucial carbon-cutting information, brands need suppliers to provide it – ideally using existing tools – and to do so in addition to their regular way of working.

So, how can we make this easier for suppliers to do?

The answer is to change how we work with suppliers. Let’s stop bombarding them with requests for information, and instead encourage them to participate.

We can consider another department that applies the principle of encouragement, which is marketing.

Because marketing teams cannot force customers to buy their services or products, they engage and encourage them by appealing emotionally.

Customers have a choice and although I would love to be able to simply tell an audience to behave in a certain way, I cannot do that.

At this point in the evolution of our relationship with suppliers, we need to think more like marketers. Suppliers, just like potential customers, have a choice. They have more agency, because now brands really need them to provide good data.

It’s not that suppliers don’t want to give brands the information they need. It’s more a case of there being too much noise for suppliers to field, noise in the form of extra tech, too many requests for information, and changing processes. It’s a lot for them to handle.

Piling on more pressure to engage suppliers in net zero efforts won’t get the best of them.

Rather, the way to get suppliers engaging in is to persuade and encourage them. Show them value. In marketing, we engage customers, build relationships, and offer them value, to capture value in return.

Most of this process addresses how we appeal to customers. The focus is not on how we can get customers to buy, it’s on what we can do for them so that they want to buy.

Relating this idea to suppliers gives us useful insight. There’s an opportunity to engage suppliers better, to strengthen the relationship with them, and to create value. This way, brands can gain true value from suppliers and get them to participate in crucial carbon cutting activities.

As the 2050 Paris Agreement deadline approaches, brands can empower themselves. What it takes is to step into suppliers’ shoes, and appeal to them in the most relevant way.