As we continue to build our membership resources for PracticalESG.com (to be launched very soon), we wanted to give you a quick preview at something that is included with a subscription. As with other CCRcorp websites (TheCorporateCounsel.net, Section16.com, CompensationStandards.com and DealLawyers.com), we feature a Q&A Forum for members to submit questions to our network of experts. Our connections who work in this area have already been submitting queries! Here’s one that offers a preview of what will be available:
Question: Part of my company’s ESG program involves getting suppliers to do and report on things that are aligned with our ESG metrics. We can’t control what our suppliers do or don’t do, especially for matters that don’t involve the products we purchase from them. What are some ways to get our suppliers to cooperate with our information requests as well as making improvements?
Answer: This can be a delicate situation, especially for suppliers of critical components, materials or services where you have limited options for alternatives. Before demanding ESG information from suppliers, you should let them know in advance and explain why you are doing it. Keep the explanation simple and avoid buzzwords and acronyms, as English may be a second language to the recipients. Ensure you communicate the importance of this matter to your company yet maintain a cordial tone and cooperative attitude. Given them reasonable timelines to respond. Offer to provide any clarifications they may need in meeting your request. More times than not, suppliers will be responsive – at least to some extent.
Where suppliers are unable or unwilling to be responsive, consider asking what the obstacle is for them. Distributors, for example, are in the difficult position of sitting in between your company and the manufacturer. They don’t have access to manufacturer’s ESG data to provide you and aren’t compensated for being an information clearinghouse.
In addressing uncooperative suppliers, there may be contract terms to fall back on to force compliance. Yet that may not guarantee conformance.
In the end, you may still not get all the information you need, or conformance from all suppliers. In that case, you need to decide how to make use of what you have, and how/whether you want to enforce contract terms and make difficult decisions.
