Unlocking the power of collaboration
Ard Verboon
18 Jul 2025 • 6 min
It's clear that business priorities have changed over the years. Long gone are the days of focusing only on financial results. Today, successful organizations measure their performance more holistically, including the impact they have on both people and planet.
Many procurement leaders are being challenged in new ways - achieving top-line growth and bottom-line impact are now as equally important as sustainable sourcing. Sometimes the more sustainable product may be more expensive, and so leaders need to balance these competing priorities.
While challenging, we cannot afford to not make our supply chain more sustainable, and we won’t achieve it alone—greater impact is made when we collaborate with our suppliers to work towards a common goal.
And a more sustainable company isn’t the only benefit. For most organizations, a supplier can also be a partner or customer of the business, making them a critical player. When nurtured correctly, these supplier relationships can move from being tactical to one that is strategic and mutually beneficial – which leads to stronger alignment on common ambitions.
So, when it comes to partnering with suppliers, where should you start?
The World Economic Forum highlights that due to their complexity, Scope 3 emissions can only be effectively reduced through joint efforts with suppliers, customers, and other stakeholders in the value chain – requiring a collaborative and innovative approach for its success.
At Schneider Electric, we realized this early on, and in 2021 we launched The Zero Carbon Project – a collaborative effort between us and our top 1,000 global suppliers to tackle supply chain decarbonization.
These suppliers make up 65% of our upstream carbon emissions (our Scope 3 upstream emissions, and arguably the most difficult area to tackle). We provide these suppliers access to tools, training, and expert advice to help them set and achieve their carbon reduction targets in their own operations (Scope 1 and 2 emissions). They can also share their best practices with each other to move even faster.
Through this program, we’re not only working towards our own sustainability commitment but multiplying our impact—suppliers feel encouraged and supported to do the same across their own ecosystems with their own suppliers, partners, and customers.
Since the program began in 2021, we have achieved 42% in average global operational emissions reduction, supported around 700+ organizations in calculating their carbon footprint for the first time and have seen 950 participating suppliers publicly declare their carbon emissions by the end of 2022.
All the raw materials that organizations purchase come from a finite supply from mother nature. This coupled with the traditional linear business cycle of ‘extract > process > consume > discard’ will mean the eventual depletion of natural resources.
This is supported by the United Nation’s 2024 Global Resource Outlook Report which highlighted that global consumption of raw materials, having already increased four-fold since 1970, is set to rise by a further 60% by 2060.
Packaging is also one of the most visible components of product delivery. Take a moment and think back to the last time you ordered something, how many layers of packaging did it come with before you reached the item you bought?
Now, imagine that across your organization’s value chain. If this concerns you, I guarantee your customers are concerned about it as well – as our customer surveys shows our customers wanted more sustainable packaging options.
Because of this, our procurement function has long been changing the way we make purchasing decisions. To ensure more sustainable sourcing practices, we committed to increasing the green, i.e. low carbon - materials content in our products to 50% by 2025 and to phase out all single-use plastics and use only recycled cardboard in all our packaging by 2025.
To get there, we’ve been working with our plastics, steel, and aluminium suppliers to ensure the extraction and processing of these materials shifted towards methods that were low in CO2, circular, and safe for both people and ecosystems. Suppliers are supported in this transition by cross-functional teams in Schneider to help explore, co-create, and develop innovative solutions and new business models.
You can’t have a socially responsible supply chain without addressing human rights. At Schneider, we are committed to equitable, fair living wages, and we also expect decent work standards from our supply chain partners.
Decent Work program
Since 2022, we have been building our Decent Work program which aims to drive beyond regulatory framework practices, which provides training and resources to our supply base. We have over 95% strategic suppliers committed to the program so far, and in 2024 we are committed to engaging all remaining suppliers to provide support to meet their decent work requirements.
ESG risk reviews
Since 2017, we undertake annual ESG risk reviews across our entire supply base to identify suppliers that are at high-risk of non-compliance. Once identified, we work closely with on-site audits to ensure there are no malpractices in place. With our strategic suppliers, we require them to meet the ISO2600 standards which are then evaluated by EcoVadis, a third-party provider of business sustainability ratings.
We don’t just stop with these tier one suppliers; the same requirements are set gradually for our tier two and three suppliers to ensure adherence to human rights requirements.
In 2024, we advanced our living wage approach further through a three-year partnership with the WageIndicator Foundation. The Foundation makes living wage data for 165 countries available to all, providing insights into wage practices globally which enables thousands of companies, including Schneider Electric and our suppliers, to make informed decisions towards the realization of living wages
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