Unsustainable Suppliers: Stick or Twist?
One of the more controversial statements I make on sustainability is that you have to be prepared to drop suppliers who are not pulling their weight on sustainability. After all, their carbon footprint is part of your carbon footprint (and your customers’) and their reputation is part of your reputation.
However, many companies – including some big names – tell me they would rather work with suppliers to improve their performance than show them the door. I can understand that sentiment, but I think the full implications of that approach have to be understood (see above).
Here’s some thoughts on when to nurture suppliers and when to walk away.
- Clearly, if the supplier shows no intention of improving, or they present a clear and present danger to your reputation, drop them as soon as you can find an alternative.
- If you want to build a new supply chain (part of the circular economy, part of the hydrogen economy etc) and your current suppliers are sticking to their traditional technologies/business models, then no matter how well they perform otherwise, you’ve got to thank them and move on.
- If a new entrant into the market can provide materials/technology which will revolutionise your ecological footprint, then you should challenge your suppliers to match that and, if they can’t, move on.
- If the existing supplier is enthusiastic about sustainability and keen to solve your sustainability problems (rather than you trying to solve theirs) then keep them – and work with them.
This might seem harsh, but we cannot create a sustainable economy while remaining faithful to suppliers who do not deserve that loyalty. We owe it to ourselves and the greater good to be firm but fair.