MCKINSEY ’ S SPENDSCAPE IS SUSTAINABLE PROCUREMENT BOOST
Global management consulting firm McKinsey has launched a software solution that draws on emissions data to create a Scope 3 baseline .
Spendscape brings together data on up to 300,000 emissions factors across the entire supply chain to create the baseline .
It works by breaking down data silos in organisations . The software then analyses market data and possible risks .
Such environmental risk is set to increase with the upcoming expansion of the CSRD directive ( Corporate Sustainability Reporting Directive ). The CSRD came into effect in January 2023 , and means an estimated 40,000 EU companies are obliged to disclose transactions across their value chains and – unlike the previous system – the data will have to be digitised .
But from 2024 onwards , the new directive will progressively impact around 10,000 non-EU companies , who will be required to disclose data relating to enterprise-wide ESG performance . Non-EU organisations that will be affected include small and medium enterprises that are listed on the European regulated market , small and “ non-complex ” credit institutions and also captive insurance companies ( wholly owned subsidiary insurers who provide risk mitigation services for a parent company , or related entities .
Many companies already include compliance requirements , such as no child labour or no toxic materials . These are mandatory , and a well-enforced as supplier-selection criteria .
Once these requirements have been met , companies can begin to focus on both cost and carbon footprint reduction in the second dimension of sustainability .
Of course , there are still tradeoffs to be made here when both requirements are not equally met , but there are opportunities to achieve this dual mission of carbon and cost reduction .
How embedded is ESG compliance in sourcing ? There is a significant need for further ESG awareness and capability building ,
116 February 2024