Approximately two-thirds of an average company’s environmental and social impact is concentrated within its supply chain. Hence, in today’s context, emphasizing sustainability in procurement and supply chain management is not merely an option, but rather an absolute necessity. At Yunex Traffic, we furnish cities, highway authorities, and mobility operators with the largest portfolio of end-to-end intelligent traffic management solutions. This extensive range of products naturally entails collaborating with numerous suppliers. The choices we make today are pivotal in shaping the planet of tomorrow. Taking care of the planet encompasses our own business practices as well. This is precisely why we are taking proactive steps towards adopting more sustainable procurement procedures, thereby shouldering our own responsibility.
Sustainable supply chains are no competitive advantage – it is our responsibility
Currently, 94% of our carbon footprint stems from scope 3 emissions. That means that most of our CO2 emissions are produced indirectly, by our supply chain and our product footprint.
At Yunex Traffic, we commit our company-wide activities to a comprehensive ESG framework (Environmental – Social – Governance) and develop measures that ensure sustainable operations within our company and within our full supply chain.
In order to reach our sustainability targets, which will be communicated shortly, we need to engage our whole supply chain to reduce the CO2 output.
And we are not done when it comes to the pure environmental impact. It is increasingly important to ensure operations are based on the right social values and have strong procedures in place to ensure compliance to new legislations. Sustainability has transitioned from a competitive advantage to a mandatory expectation. And we are here to rather exceed than just meet this expectation.
The question of “how”: what we are doing
Previously, we were focusing on four main criteria for supplier selection which were: Quality, technology, availability, and cost-competitiveness. As part of the supplier selection and onboarding process and within our commodity strategies, we have now integrated “sustainability” as an additional dimension.
This is an important mindset shift we are doing within our own company, but also something our supplier base must understand and adapt to. We have made ESG and sustainability one of our top priorities and are now working on the implementation.
Therefore, we must prioritize sustainability and assess total value, rather than focusing solely on upfront costs.
However, sustainability integration in the supply chain is still in its infancy. According to Gartner, only a third of the supply chain leaders say they have no or low-maturity sustainability initiatives.
And it is the same on the supplier’s side. While some suppliers have made commendable progress, others are yet to embark on this journey. As trustful and reliable relationships with strategic vendors are increasingly key to business performance, our team at Yunex Traffic is here to support actively alongside the way.
For example, we provide our suppliers with a one-stop portal (IntegrityNext) for all ESG matters. Suppliers self-report by answering questionnaires, uploading certificates, and inputting data. At this information-gathering stage, it is vital to ensure the data gathered is reliable.
We assess the supplier profiles based on country and industry risk, as well as response quality using a traffic light system. Commencing with governance metrics, such as ISO compliance and adherence to our code of conduct, provides a solid foundation for action plans that can be built.
Furthermore, we are providing resources and workshops to outline our expectations. While suppliers are eager to support, they acknowledge the challenges of starting this transformative journey.
Therefore, staying abreast of evolving sustainability regulations and standards is imperative. For this, we rely on state-of-the-art tools and various platforms to keep us informed.
Looking ahead: opportunities for procurement to evolve
Technological innovation will be the linchpin of meaningful sustainability strides helping us and our suppliers to adjust to a more sustainable supply chain – holistically.
So, for example, it is not only the environmental impact of production we need to look at. The recent German Supply Chain Due Diligence Law, for example, underscores our responsibility to identify, assess, remedy, and prevent human rights violations within our supply chain, too. Therefore, data will be key.
Gathering necessary data requires multiple systems, and analyzing this data demands considerable time and effort. Due to the stringent reporting requirements, the reliability, safety and real-time information of the data will be critical.
What we need: open dialogues within the industry
Procurement must evolve into an entrepreneurial function, collaborating with a huge range of stakeholders, suppliers, and market experts. Even competitors! To navigate future trends, there should be an open dialogue.
Let’s collectively, as the ITS industry, forge ahead, pioneering a more sustainable future in procurement and the supply chain. Together, we can make a meaningful difference and bring the ITS industry to new levels in terms of sustainable operations!