Consumer products giant Procter & Gamble joined a growing number of companies to announce Green measurement programs for their suppliers bases with its new Supplier Environmental Sustainability Scorecard.
As is usual with P&G, the program has been well thought out, and is based on result of 18 months of work and close collaboration with the company’s Supplier Sustainability Board, which includes more than 20 leading supplier representatives from P&G’s global supply chain. It is based largely on accepted industry practice and standards, such as work that has been produced by World Resources Institute, the World Business Council for Sustainable Development and the Carbon Disclosure Project.
P&G has made the scorecard “open,” meaning its is freely downloadable and available for P&G suppliers to use for their own supply chains or for other companies to use as is or as a baseline to tweak for their own specific needs. (The P&G scorecard can be downloaded here: Procter & Gamble Environmental Sustainability Scorecard.
P&G says the scorecard will ultimately have five primary uses within its own operations:
- To produce annual supplier sustainability performance ratings
- To influence its procurement spend decisions
- To track improvement in various supplier Sustainability measures
- To assess and model environmental impact in product design
- To be able to model P&G’s full supply chain environmental impact, once a critical mass of suppliers is on the program
A review of the scorecard shows it is not to burdensome at one level, requesting suppliers report on a relatively few number of inputs, such as energy usage, water usage, greenhouse gas emissions, waste and its disposal, and response to P&G’s own Green suggestions or initiatives to its suppliers.
The challenge with this or any Green scorecard is that P&G wants those metrics reported specific to production, transportation and other factors in a supplier just for the products supplied to P&G. How such measures will be captured and allocated will likely remain a challenge for companies for some time.
At the end, through a method not clearly spelled out, each supplier will annually receive a score from P&G for its Green supply chain efforts, ranging from Well Above Expectations to Well Below Expectations, as shown in the graphic below.
"We worked closely with a global team of P&G personnel, suppliers and supply chain experts to determine the most effective way to measure the environmental performance of our diverse global supplier base," said Rick Hughes, P&G global purchasing officer. “Our suppliers wanted a tool that was flexible yet grounded in existing measurement standards and, by working together, we developed a framework that will help drive real improvement across all industries.”
P&G says it is going to roll out the program to key suppliers first, understand the learnings from that effort, make adjustments as necessary and then roll the scorecard out to the rest of its supply base.
The company adds that “Suppliers will have a full year to prepare to report their data before the rating can adversely impact their supplier rating with P&G. In the future, P&G will use the scorecard to determine each supplier’s sustainability rating as part of P&G’s annual supplier performance measurement process.”
What do you think of P&G’s Green supplier scorecard? How easy or hard will it be for companies to report these types of metrics at an individual customer level? Let us know your thoughts at the Feedback button below.
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