The new focus on sustainability requires that organizations implement new metrics and key performance indicators (KPIs) in order to address how they and their supply chain are performing.
It is important to apply sustainability principles in the development of KPIs and benchmarking standards. The metrics below are applicable across industries and can be used both internally and by procurement to measure the sustainability performance of the supplier base:
- Compliance with economic, social and environmental legislation and standards ◦ Sustainability guidelines for behavior, such as UNGC, ILO, and OECD guidelines ◦ Sustainability management system standards and certification– ISO 14001, SA 8000, etc.
- Inclusion of sustainability criteria in all procurement decisions
- Embedding of sustainability and corporate social responsibility principles into supplier decisions and contracts
- Providing information for corporate sustainability reporting ◦ Global Reporting Initiative (GRI) reporting ◦ Qualitative monitoring of supplier sustainability performance communication ◦ % of spend with suppliers who report in environmental impact
- Evidence of measuring or requiring sustainable practices by their suppliers and sub-suppliers
- Disclosure of any infractions