Royal London (UK) underscores the influence of the supply chain on its emissions. Approximately 53% of the company’s non-investment-related emissions are attributed to its supply chain. Recognising this, the insurer emphasises supplier engagement to align with its climate goals.
Royal London’s strategy involves a four-step process: measurement, assessment, support, and engagement. Measurement includes understanding the emissions portfolio and supplier contributions to emissions. Assessment delves into supplier emissions, targets, and actions, often using third-party data sources like carbon disclosure project (CDP) disclosures. Support entails equipping internal stakeholders with tools and training for effective supplier engagement. Engagement involves initiating conversations, understanding supplier climate actions, and identifying collaboration opportunities.
Despite challenges with supplier responses and data quality, Royal London remains steadfast in its commitment to climate targets. The company focuses on raising awareness among stakeholders about the impact of supplier emissions and integrating climate considerations into supplier selection and management processes.
Benenden Health, a UK based not-for-profit private healthcare mutual, adopts a practical and tactical approach to integrating ESG considerations into its supply chain. Despite being a smaller organisation, Benenden Health acknowledges the importance of making a positive impact through its supplier relationships.
A cornerstone of Benenden Health’s strategy is to balance realism with ambition. Rather than waiting for a comprehensive strategy, the company initiated targeted steps to address immediate needs. It updated due diligence questionnaires, reviewed contract templates, and integrated an ESG schedule into contracts to ensure that ESG considerations are not neglected.
To manage the influx of information, Benenden Health compiles supplier data into a summary and dashboard. This tool aids in tracking and evaluating suppliers based on specific ESG criteria. By focusing on its top suppliers, Benenden Health aims to create meaningful change while building relationships and considering the needs of its diverse supplier base.
Aviva Investors demonstrates a holistic and ambitious commitment to sustainability by actively integrating ESG principles into its supply chain. At the core of its approach is the Net Zero Supply Chain Manager, who operates within the broader framework of the Operations Net Zero Programme. Aviva Investors’ strategy is rooted in aligning with the majority of Sustainable Development Goals (SDGs) and participating in the Science Based Targets Initiative (SBTI). By setting validated emission reduction targets across all scopes, including purchased goods and services, Aviva Investors underscores its dedication to achieving net zero emissions.
One of Aviva Investors’ notable objectives is to become a net zero company by 2040, with interim targets of net operations and a net zero supply chain by 2030. To achieve these goals, Aviva Investors aims to direct a significant portion of its spending towards suppliers with approved science-based targets, reaching 70% by 2025. This focus on suppliers’ alignment with sustainability goals demonstrates Aviva Investors’ intention to drive change throughout its supply chain.
Aviva Investors’ approach involves a collaborative and incentivised engagement with suppliers. It mandates suppliers with contracts valued over GBP 1,000,000 to establish their science-based targets. Additionally, Aviva Investors has introduced ESG weightings into sourcing activities to ensure that sustainability considerations are embedded from the outset of supplier relationships.
The collaboration extends to partnerships with entities like Ecovadis, whose sustainability assessments offer insights into supplier performance. Aviva Investors’ engagement with suppliers goes beyond contractual obligations, as they host events like the Net Zero Supply Summit to facilitate dialogue, best practice sharing, and a sense of partnership.
The approaches of Royal London, Benenden Health, and Aviva Investors to integrating ESG considerations into their supply chains highlight the multifaceted nature of sustainability efforts. While Aviva Investors demonstrates a comprehensive commitment to net zero emissions and collaboration, Benenden Health emphasises practical steps and supplier engagement, and Royal London focuses on measurement, assessment, and targeted engagement. Collectively, these varying strategies offer valuable insights into the various pathways that organisations can adopt to align their supply chains with global sustainability objectives.
