You should consider whether to report the impacts of your suppliers because your choice of supplier affects the environmental impact of your business. For example, the environmental impact of a clothing factory in Asia will be different to a factory in Europe due to its location, production processes, etc.
There isn't a standardised technique for reporting the effect of a supply chain in terms of a key performance indicator (KPI). However, you can assess the environmental impact of your supply chain in the following ways:
- Examine your sales ledger to ensure you understand how much you spend with your different suppliers, and what industry sector they are in - eg manufacturing, financial services, courier services, etc.
- Find out the typical environmental impacts and risks of different industry sectors. You can download environmental Key Performance Indicators reporting guidelines (PDF, 354K).
- Assess where to focus your efforts, based on both how much you spend with a supplier and the impact they have on the environment. For example, for some businesses it may make more sense to focus on their electricity supplier rather than their office materials supplier.
- Engage with your suppliers as part of your stakeholder engagement process. If you don't already, encourage your suppliers to report their environmental impact using the KPIs that are appropriate for their business sector. Consider encouraging suppliers to improve their environmental performance.
- Use the environmental reporting information from your suppliers as a source of data for your own environmental reports, and as a valuable input to your environmental management system and processes.