Key Strategies for Effective Supply Chain ESG Reporting

January 15, 2025

As the global economy transitions towards more robust sustainable practices, organizations face growing pressure to demonstrate accountability and transparency in their Environmental, Social, and Governance (ESG) practices. This article covers key strategies you can apply to effectively engage your supply chains in ESG reporting.

Governmental regulations like the European Union’s Corporate Sustainability Reporting Directive (CSRD) and ’voluntary‘ frameworks (usually highly demanded by buyers and investors) such as CDP (formerly the Carbon Disclosure Project) and the Science-Based Targets initiative (SBTi) are setting the standard for transparent and accountable reporting. However, compliance isn’t just about avoiding penalties or a box-ticking exercise; it is a strategic catalyst you can apply to align your business operations with investor expectations and societal demands, and enable the building of stronger relationships with key supply chain partners.

Supply chains generally account for a significant portion of a company’s environmental footprint, so supply chain engagement is particularly important to align with legislation, manage operational risks, and track ESG performance. Below are key strategies to help effectively engage your supply chains in ESG reporting.

Strategic actions for effective supply chain ESG reporting

Know regulatory demands
Stay updated on evolving regulations and ensure your reporting strategy adheres to mandatory requirements.
Establish a core data collection team
Assemble a cross-functional team responsible for gathering, managing, and analyzing ESG data. Generally, your core team should exist for your company’s own operations, and this group or a sub-set would be responsible for helping gather and analyze information from supply chain partners. Key functions should include but may not be limited to sustainability, procurement, finance, facilities, operations, logistics, marketing and human resources. Your team should also be able to identify gaps, standardize processes, and drive continuous improvement in ESG data collection and analysis.
Set clear objectives and timelines
Clearly define your reporting objectives and goals. Objectives should address both legislation compliance needs and internal sustainability program goals. Set reporting timelines that align with these elements.
Develop a checklist
With input from the team, develop a detailed document outlining the specific data points required from your suppliers, such as emissions metrics, energy and water use, waste diversion, and social responsibility practices. Other key data points will likely include ESG targets you have set and case studies that highlight practices in action. Your checklist helps ensure the data ask is consolidated, consistent and as efficient as possible. Consider software such as NSF TraQtion, to help streamline data collection and reporting to formalized frameworks.
Engage your supply chain
Active engagement is critical. Depending on the extent of reporting required, as soon as objectives are clearly defined, supply chain partners should be notified of the upcoming reporting efforts to ensure they understand reporting requirements and their role in achieving reporting objectives. Consider website sub-sites to disseminate information, contain FAQs, or offer templates partners can use for data collection. Consider training programs and communication platforms such as open office hours to answer questions. Incentives to foster participation – which can cover a large spectrum – can also be considered. Additional ways to engage the supply chain can be found in this whitepaper: Building a Food Supply Chain Sustainability Program.
Reserve time for legal, marketing and verification
Accurate reporting builds trust. Dedicate sufficient time for a third party to verify collected data – especially those related to climate, deforestation and social practices – and to review disclosures from a legal perspective to ensure accuracy and compliance.

Benefits of proactive reporting

By embedding robust reporting practices into supply chain management, you can gradually and effectively enhance transparency and demonstrate supply chain controls to build and strengthen trust. Additionally, you can identify areas for operational improvement and cost savings in order to gain a competitive edge by demonstrating leadership in your industry and in sustainability. Thus, this will also lead you to mitigate risks associated with non-compliance and reputational damage.

Conclusion

Supply chain emissions and ESG reporting are no longer optional in today’s business landscape. By establishing clear reporting strategies and aligning with ESG frameworks, you can meet regulatory demands, foster supply chain engagement, and create a pathway toward meaningful environmental and social impact. Today is the time to act—because the future of sustainable business depends on it.

Lisa Spicka de Bevacqua

Global Director, Sustainability Consulting

Lisa, who holds a Bachelor of Arts in Spanish from the University of Nebraska and a Master of Business Administration in Global Management from Thunderbird School of Global Management is a sustainability leader in the natural products industry who helps clients design and integrate sustainability strategies that address ESG reporting, climate action, and supply chain integrity.