Sustainability Atlas
Policy, Standards & Strategy·13 min read··...

Interview: the builder's playbook for Procurement & supplier engagement — hard-earned lessons

A practitioner conversation: what surprised them, what failed, and what they'd do differently. Focus on data quality, standards alignment, and how to avoid measurement theater.

Scope 3 emissions account for an average of 75% of corporate carbon footprints, yet only 38% of companies actively engage suppliers on emissions reduction targets according to CDP's 2024 Global Supply Chain Report. The gap between sustainability commitments and supplier-level execution represents one of the most significant—and least understood—challenges facing procurement teams today. We spoke with practitioners across manufacturing, retail, and technology sectors to understand what's actually working in supplier engagement and what lessons they've learned the hard way.

The sustainable procurement market reached $16.8 billion in 2024 and is projected to grow to $36.2 billion by 2030, driven primarily by the EU's Corporate Sustainability Reporting Directive (CSRD) and similar regulations requiring verified value chain data. But as practitioners told us repeatedly, the real challenge isn't spending—it's getting credible, actionable data from suppliers without creating what one sustainability director called "measurement theater."

Why It Matters

The regulatory landscape has fundamentally shifted. The CSRD now requires approximately 50,000 EU companies to report Scope 3 emissions with third-party assurance, with the first reports due in 2025. The Corporate Sustainability Due Diligence Directive (CSDDD) extends liability for environmental and human rights violations throughout supply chains. In the US, California's Climate Corporate Data Accountability Act mandates Scope 3 reporting for companies with revenues exceeding $1 billion.

For procurement teams, this translates to an urgent operational challenge: transforming supplier relationships from transactional exchanges into data partnerships. A 2024 McKinsey analysis found that companies with mature supplier engagement programs achieved 2.3x faster emissions reductions than those relying on industry averages and estimates. Yet 67% of procurement professionals surveyed by EcoVadis report that obtaining accurate primary data from suppliers remains their top challenge.

The financial stakes are substantial. Companies failing to meet CSRD requirements face fines up to 5% of global turnover. More immediately, major buyers including Apple, Walmart, and Unilever are de-listing suppliers that cannot provide verified sustainability data—creating competitive pressure that cascades through supply chains regardless of regulatory jurisdiction.

Key Concepts

Primary vs. Secondary Data

"The single biggest lesson we learned was the difference between data that looks credible and data that actually is," explains a sustainability procurement lead at a major European retailer. "Secondary data—industry averages, spend-based calculations—got us through our first reporting cycle, but it's essentially useless for driving actual reductions."

Primary data comes directly from suppliers' measured operations: actual energy consumption, specific material inputs, verified waste outputs. Secondary data uses proxies and averages. The CSRD explicitly favours primary data, and auditors are increasingly challenging companies that rely heavily on estimates.

The Additionality Problem

Additionality refers to whether a claimed improvement would have happened anyway without intervention. "We had suppliers claiming emissions reductions that were actually just natural efficiency gains from equipment upgrades they'd already planned," notes a procurement director at a manufacturing conglomerate. "Without baseline agreements and clear attribution methodology, you're essentially taking credit for business-as-usual."

Practitioners recommend establishing supplier baselines before launching engagement programs and using contractual mechanisms—such as emissions reduction clauses with specific targets—to create genuine additionality.

Standards Alignment Complexity

The proliferation of sustainability standards creates significant friction. Suppliers may be asked to report against CDP, EcoVadis, SBTI, GRI, and multiple buyer-specific requirements simultaneously. "One of our key suppliers was spending 40% of their sustainability team's time just responding to different questionnaires asking for essentially the same information in different formats," observes a sustainable sourcing manager at a technology company.

The emerging solution is convergence around core frameworks—particularly the IFRS Sustainability Disclosure Standards (ISSB)—combined with data-sharing platforms that allow suppliers to respond once and distribute to multiple buyers.

Measurement Theater vs. Genuine Progress

Perhaps the most important concept practitioners emphasised was distinguishing between activities that create the appearance of progress and those that drive actual impact. "Measurement theater is when you have beautiful dashboards and quarterly reviews, but the underlying data is so poor that you're essentially tracking noise," explains a former sustainability consultant now working in-house. "The hardest thing is admitting what you don't actually know."

Signs of measurement theater include: excessive reliance on spend-based calculations, lack of year-over-year consistency in methodology, inability to trace data to source documents, and supplier self-reporting without verification.

What's Working

Schneider Electric's Supplier Decarbonisation Program

Schneider Electric's "Zero Carbon Project" has engaged over 1,000 suppliers representing 70% of the company's upstream emissions. The program provides suppliers with free access to carbon accounting tools, training resources, and consultation services. Crucially, Schneider ties procurement decisions to supplier performance: by 2025, suppliers representing the top 1,000 emitting entities must demonstrate Science Based Targets or face reduced order volumes.

Results have been measurable: participating suppliers achieved an average 10% reduction in carbon intensity by 2024, with the program saving an estimated 300,000 tonnes of CO₂ annually. The key insight was that capacity building—not just requirements—drives adoption.

IKEA's Supplier Energy Transition

IKEA's approach focuses on practical intervention rather than data collection alone. The company has invested €400 million in renewable energy projects specifically for supplier operations, including on-site solar installations and power purchase agreement (PPA) aggregation for smaller suppliers who couldn't access renewables independently.

"What worked was removing barriers, not adding requirements," notes an industry analyst familiar with the program. "IKEA realised their suppliers weren't resisting sustainability—they lacked capital and expertise. By providing both, they saw adoption rates triple compared to mandate-only approaches."

CDP Supply Chain Program Verification Tiers

CDP's Supply Chain program introduced tiered verification requirements in 2024, requiring higher-emitting suppliers to obtain third-party assurance while allowing smaller suppliers to self-report with random audits. This graduated approach addresses a key practitioner complaint: that one-size-fits-all verification requirements either overwhelmed small suppliers or inadequately scrutinised large ones.

Companies participating in the enhanced verification tier report 23% higher data accuracy scores and significantly fewer material restatements in subsequent reporting periods.

What's Not Working

Questionnaire Fatigue Without Action

"We sent our suppliers a 200-question sustainability assessment and got beautiful responses. Then we did nothing with it for 18 months," admits a procurement manager at a consumer goods company. "By the time we wanted to engage again, supplier trust was gone. They'd learned that our questionnaires were checkbox exercises, not genuine partnerships."

Practitioners consistently warned against data collection without clear follow-through. The solution is fewer, more focused assessments tied to specific action commitments—and transparent communication about how data will be used.

Over-Reliance on Self-Reported Data

A 2024 study by the MIT Center for Transportation and Logistics found that supplier self-reported emissions data contained material errors in 43% of cases when compared to third-party verification. Common issues included inconsistent boundary definitions, double-counting of renewable energy certificates, and incorrect emissions factors.

"The uncomfortable truth is that most supplier data is wrong by default," explains a supply chain sustainability researcher. "Not because suppliers are lying, but because carbon accounting is genuinely complex and most companies lack expertise. Without verification, you're building strategy on sand."

Ignoring Tier 2+ Suppliers

Most engagement programs focus on direct (Tier 1) suppliers, but for many industries, the majority of emissions occur further upstream. "We spent two years getting great data from our direct suppliers, then realised 60% of our materials emissions came from their suppliers—Tier 2 and 3—where we had no visibility at all," notes a procurement sustainability lead.

Addressing this requires cascade mechanisms: contractual requirements for Tier 1 suppliers to engage their own supply chains, combined with platforms that enable data flow across multiple tiers without requiring direct relationships.

Pilot Programs That Don't Scale

Multiple practitioners described successful pilot projects that failed to expand. Common failure modes include: reliance on grant funding that doesn't renew, manual data collection processes that don't survive team changes, and partnerships with suppliers who are uniquely receptive rather than representative.

"Our pilot with five suppliers was a complete success—great data, genuine reductions, strong relationships. But it took 0.5 FTE per supplier to maintain. When we tried to scale to 500 suppliers, the model completely broke," recalls a supply chain director.

Key Players

Established Leaders

  • EcoVadis — Leading sustainability ratings platform assessing 130,000+ companies across 220 industries. Provides standardised scorecards enabling buyer-supplier benchmarking and integrates with major procurement systems including SAP Ariba and Coupa.

  • CDP (formerly Carbon Disclosure Project) — Operates the largest environmental disclosure system globally with 23,000+ companies reporting in 2024. Supply Chain program engages 340+ purchasing organisations representing $6.4 trillion in procurement spend.

  • Sphera — Enterprise sustainability software serving 10,000+ customers with integrated lifecycle assessment, product stewardship, and supply chain risk management. Acquired by Blackstone in 2021 for $1.4 billion.

  • IntegrityNext — Supplier sustainability and compliance platform used by Siemens, BMW, and Volkswagen. Automates supplier self-assessments and risk monitoring across ESG dimensions.

Emerging Startups

  • Altana AI — Supply chain visibility platform using AI to map multi-tier supplier networks. Raised $200M Series C in 2024 at $1B+ valuation. Partners with US Customs and major retailers for supply chain transparency.

  • Carbonfact — Product-level carbon footprinting for fashion and consumer goods. Raised €14M Series A in 2024. Clients include Allbirds, Salomon, and Decathlon.

  • Pledge — API-first carbon accounting infrastructure enabling companies to embed emissions calculations into procurement workflows. Raised $10M in 2024, powers carbon data for 100+ enterprise customers.

  • Sumday — Supplier engagement platform specifically designed for SME suppliers lacking sustainability resources. Provides simplified data collection and capacity-building tools.

Key Investors & Funders

  • Breakthrough Energy Ventures — Bill Gates-founded climate fund with $3.5B under management. Invested in supply chain decarbonisation including LanzaTech and CarbonCure.

  • EU Horizon Europe — €95.5B research and innovation programme (2021-2027) funding supply chain sustainability innovation including €320M for sustainable supply chain projects.

  • Salesforce Ventures — Corporate VC arm with climate-focused Impact Fund. Invested in sustainability platforms including Watershed, Persefoni, and supply chain visibility tools.

  • SYSTEMIQ — Systems change company providing both consulting and investment in supply chain transformation. Partners with major foundations including IKEA Foundation and Laudes Foundation.

Action Checklist

  1. Segment suppliers by emissions materiality: Identify the 20% of suppliers representing 80% of your Scope 3 footprint using spend-based estimates, then prioritise primary data collection from this cohort first.

  2. Establish baselines before engagement: Document supplier emissions performance before launching improvement programs to enable credible additionality claims and avoid attribution disputes.

  3. Consolidate data requests: Audit internal stakeholder requirements to eliminate duplicate questionnaires. Where possible, accept CDP or EcoVadis responses rather than proprietary assessments.

  4. Build verification into contracts: Include audit rights, data accuracy warranties, and emissions reduction clauses in supplier agreements—especially for strategic suppliers representing material emissions.

  5. Provide capacity, not just requirements: Budget for supplier training, tool access, and technical assistance. Consider co-investment in emissions reduction projects where suppliers lack capital.

  6. Create cascade mechanisms: Require Tier 1 suppliers to engage Tier 2+ on sustainability data, with contractual flow-down provisions and visibility into upstream reporting.

  7. Track data quality, not just volume: Develop internal metrics for data accuracy, primary vs. secondary data ratios, and verification coverage—not just response rates.

  8. Communicate consequences and benefits: Be explicit about how sustainability performance affects procurement decisions, including preferential treatment for high performers and potential de-listing for non-responders.

FAQ

Q: How do we engage suppliers who lack sustainability expertise or resources? A: This is the most common challenge, especially with SME suppliers. Effective approaches include: providing free access to carbon accounting tools (Schneider Electric offers suppliers access to Greenhouse Gas Protocol-compliant calculators), creating simplified data collection templates that map to regulatory requirements, offering training webinars and office hours, and partnering with industry associations to provide collective resources. Some companies establish "sustainability ambassadors" among their buyer teams who can provide hands-on support. The key insight from practitioners is that capacity constraints, not resistance, typically explain poor engagement—so removing barriers works better than adding pressure.

Q: What's the right balance between primary supplier data and industry averages? A: CSRD guidance and auditor expectations are converging on a principle of "primary where material." For your top 50-100 suppliers by emissions (typically covering 70-80% of Scope 3), invest in obtaining primary, verified data. For the long tail, spend-based calculations using quality emissions factors (such as those from EXIOBASE or DEFRA) remain acceptable. However, be prepared to demonstrate a "glide path" showing how primary data coverage will increase over time. A 2024 CDP analysis found that leading companies average 60% primary data coverage for Scope 3, up from 35% in 2022—suggesting this is the emerging standard.

Q: How do we avoid "greenwashing" accusations when reporting supplier improvements? A: Three practices help establish credibility: First, distinguish between intensity reductions (emissions per unit output) and absolute reductions—intensity improvements can mask absolute increases if supplier volumes grow. Second, be transparent about methodology changes and restatements; auditors view consistent but imperfect methodology more favourably than frequent "improvements" that happen to increase reported progress. Third, seek third-party verification for material claims, particularly those featured in public communications. The Science Based Targets initiative (SBTi) is increasingly becoming a safe harbour—claims aligned with validated SBTi targets carry lower litigation and reputational risk.

Q: What contractual mechanisms actually work for driving supplier sustainability? A: Practitioners report success with graduated approaches: start with information rights (requiring suppliers to disclose emissions data), progress to performance requirements (binding targets for emissions intensity), and ultimately tie commercial terms to sustainability outcomes (pricing adjustments, volume commitments, or contract renewals). Effective contracts include specific baseline definitions, agreed measurement methodologies, reasonable timelines for improvement, and both positive incentives (preferred supplier status, longer contracts) and negative consequences (reduced volumes, delisting). Avoid vague commitments like "best efforts toward sustainability"—these create disputes and provide little leverage.

Q: How should we think about CSRD compliance vs. genuine supply chain transformation? A: Practitioners consistently distinguished between "compliance minimums" and "strategic opportunity." CSRD compliance requires reasonable Scope 3 estimates with improving primary data coverage over time—achievable through systematic data collection and industry averages. Strategic transformation means using supplier engagement to drive actual emissions reductions, cost savings from efficiency gains, and competitive advantage through supply chain resilience. The former is table stakes; the latter creates value. The danger is treating compliance as the goal—which leads to measurement theater—rather than using reporting requirements as scaffolding for genuine operational change. Companies seeing the best results treat CSRD as a forcing function to build supplier relationships they needed anyway.

Sources

The transformation of procurement from cost-focused function to strategic sustainability lever represents one of the most significant operational shifts in modern business. Practitioners who shared their experiences were consistent on one point: the companies seeing real results treat supplier engagement as relationship building, not data extraction. Those willing to invest in supplier capacity, accept imperfect progress, and connect sustainability to commercial outcomes are achieving what measurement theater cannot—genuine, verifiable reductions in supply chain emissions.

Topics

procurementsupplierEPRstandardsCSRDtraceabilityadditionality

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