Tools

Supply chain management

The United Kingdom's Department for Environment, Food and Rural Affairs (DEFRA) has published reporting guideline entitled,  "Environmental Key Performance Indicators - Reporting Guidelines for UK Business".  DEFRA's guidance document provides this  step-by-step tool to help identify  the key  performance indicators (KPIs)  across the supply chain as well as the  key members of the supply chain which should be engaged with for successful supply chain management.    For ICMM members this list of KPIs can be supplemented with those found in the GRI Metals and Mining Supplement.

1. Determine which companies your business spends its money with. This information should be contained within the company’s purchase ledger.

2. Categorise your expenditure into sector groupings where possible (see Figure below).

3. Assess the typical environmental impacts and risks each supplier sector has. Refer to the figure below for a list of KPIs by sector.

4. Determine where to focus your efforts. Clearly some suppliers, even suppliers in the same sector, have more significant environmental impacts than others. It is important to prioritise your suppliers in a way that takes into account both the amount of money you spend with them and the relative environmental impact they have. This is especially important for companies with a significant number of suppliers.

5. Engage with your suppliers. Encourage your suppliers to report on the environmental  KPIs relevant to their sector.

6. Establish a process enabling suppliers to record, measure and report back on their environmental impact.

7. Influence purchasing decisions with the information gathered. Improvements in your suppliers’ environmental performance will be more likely if they know that their environmental performance is a factor in your company’s buying decisions.

8. Consider post-contract supplier development to focus on engaging suppliers in continuous improvement in environmental management.