STRATEGIC SOURCING
Overcoming implementation challenges However, being successful isn’ t as simple as implementing a tool or starting discussions around the importance of ESG. Ard recognises that there are hurdles in overcoming the mindset that sustainability is too costly or not relevant to the core business.
“ There’ s also a lot of jargon and complexity out there,” he adds.“ Sometimes, experts know the theory but not the practical side, or vice versa. The real progress happens when we find common ground between sustainability know-how and procurement expertise.
“ Similarly, not all suppliers are at the same stage, so we’ ve built a support system that meets them where they are. We offer hands-on training, resources, and ongoing support, all tailored to local realities.
“ Getting accurate emissions data was another challenge, so we invested in digital tools to help suppliers track and report their numbers. With a global supply chain, complexity is always a factor, but by regionalising operations and staying agile, we’ ve been able to adapt quickly, even when disruptions hit.”
Supply chain visibility and traceability When companies come to McKinsey looking for ways to improve their supply chain visibility and traceability to support ESG risk management, it recommends Tier-n supply chain visibility on ESG parameters including carbon emissions, circular material shares or labour conditions, the holy grail of end-to-end supplier management for sustainability.
ESG FACTORS CREATE LONG-TERM COMPETITIVE ADVANTAGE AND BUILD STAKEHOLDER TRUST
As Peter explains, procurement has often focused on cost, quality and time constraints, which can limit the scope of improvements and the depth of supplier engagement.
Evaluating suppliers by also considering their carbon reduction performance, means companies can not only drive decarbonisation across their supply base but also foster a collaborative spirit, emphasising shared goals and creating transparency as required by regulatory entities.
Buyers reduce their carbon costs; suppliers reduce their emissions – a factor that could increase competitiveness in tight markets.
204 September 2025