5 Tips for Suppliers and Manufacturers
Blog by Vincent Erasmy, Carbon Competence Lead at First Climate
With stricter sustainability regulations emerging, large corporates within the EU are increasingly focused on the ESG impact of their supply chains. While many small and medium enterprises (SMEs) do not yet fall under the EU regulation, the ripple effects are already being felt— and they’re only set to grow stronger. Over the past year, an increasing number of small and medium-sized businesses have reached out to us for help in improving and reporting on their environmental impact and sustainability efforts. When asked what sparked this interest, many pointed to their larger corporate clients, who are working to decarbonize their supply chains and encouraging their suppliers to take action and report their progress.
If your business also finds itself facing these new expectations, it may come as a challenge. However, it’s also an opportunity to stand out, and position your company as reliable, forward-thinking partner for your corporate clients. Beyond meeting external expectations, it’s also effective risk management. ESG and climate analyses can reveal efficiency gaps and uncover potential risks from the impacts of climate change. So where can you begin to meet these new sustainability demands and best position your company?
Adapting to Stay Competitive
Meeting evolving expectations concerning sustainability-based processes is crucial to maintaining and growing your business relationships in both the short and long term. To help you navigate these changes, I’ve put together five essential tips for your company to align with the sustainability demands of today’s market and tap into the opportunities that come with it.
Be sufficiently prepared for more questions regarding sustainability
If your stakeholders haven’t reached out to you already, then it may only be a matter of time until they will. Each client may have different priorities, whether it’s reducing carbon emissions, minimizing waste, or ensuring ethical sourcing. Assigning someone in your company to be the point of contact for sustainability initiatives is a good starting point for many smaller and medium sized enterprises. This person can get in contact internally with the relevant departments to start facilitating the data collection process, and eventually also with external business partners to report.
Set youself apart by adopting science-based targets
Right now, many larger companies are looking to work with suppliers that show a clear-cut commitment to climate action and sustainability so that in turn, they too can show their commitment to a sustainable supply chain to their own stakeholders. One of the best ways that your company can demonstrate this commitment is by setting and validating science-based targets: goals that define a clear emissions reductions pathway in alignment with the latest climate science.
By adopting science-based targets, you are signaling to larger clients that your company takes its responsibility and commitment to climate action seriously, which could eventually lead to more business in the future. It could help your company to stand out from other suppliers in your industry, as investors and companies increasingly look for business partners that have clear sustainability goals. The Science Based Targets initiative (SBTi) offers a streamlined process specifically for SMEs — making it easier for smaller businesses to take meaningful climate action without the complexity required of large corporations.
Calculate your footprint and start data collection
As stricter regulations come into play, many large companies will want to know your Scope 1, 2, and 3 emissions to gain a full picture of their supply chain—and, ultimately, their own environmental impact. Stay ahead by calculating your company’s annual carbon footprint, even if a larger business partner hasn’t yet requested it.
Data collection can be done with tools like an excel sheet, but this quickly becomes daunting and complicated. Online carbon management and reporting tools like my.FirstClimate can significantly help, or reach out to one of our expert consultants. SMEs which might not have a dedicated sustainability manager can particularly benefit from digital solutions. And if you’re looking for tailored advice, our team of sustainability experts is just a call away to help you meet these evolving standards.
Make use of voluntary reporting platforms to better align data
Voluntary reporting platforms like CDP enable suppliers and manufacturers to report their ESG impact in alignment with major international standards. This can make it significantly easier for large companies to understand your environmental contributions within their broader climate goals. CDP's format helps present your company’s impact clearly and comparably.
In 2024, CDP introduced a questionnaire specifically for SMEs, making it easier for SMEs to voluntarily disclose their climate impact. If a major corporate client already reports through CDP, then your disclosure can be seamlessly integrated into their reports, fostering transparency and alignment.
As a CDP Accredited Solutions Provider for Renewable Energy and Science-Based Targets, our team is here to assist your company in navigating CDP reporting and ensuring that your sustainability initiatives are effectively communicated.
Tip! Mandatory Reporting is just around the corner. If your company is in the EU, then the deadline for mandatory reporting for SMEs under the Corporate Sustainability Reporting Directive (CSRD) has already arrived or is quickly approaching. SMEs that don‘t fall under the mandatory CSRD reporting for SMEs have the option to voluntarily disclose, which could also help to fulfill expectations from large buyers. You will need to start gathering data and assessing your company’s impact with a double materiality assessment. Find out here about the effects of the CSRD on your company.
Remember that it is a journey—and one that can benefit you.
While it can be challenging, it’s important to remember that impactful climate action is a journey achieved step-by-step, not overnight. Looking beyond meeting corporate client demands, there are many benefits for companies that take the early jump into embedding ESG and sustainability practices into their operations.
Measuring and analyzing your company’s impact is not just to the benefit of your larger corporate clients, but to you as well. Finding ways to reduce emissions oftentimes goes hand in hand with identifying new efficiency possibilities and even savings.
Positioning your company better with the above steps could help your business to attract new clients and new investors. Because ESG often influences a business’ long-term resilience, investors and shareholders are increasingly taking ESG into consideration in their decision-making.
Get Started Today
Meeting the sustainability demands of major corporate clients can be challenging, no matter where your company may find itself on its individual climate journey. Limited resources and time mean that suppliers and manufacturers must set clear priorities on which step they will take next. Do you need assistance in planning the next steps of your climate and sustainability journey? First Climate is here to help.
We have 25 years of experience in supporting clients, both large and small to embed sustainability into their operations, so we understand what large multinational corporations are looking for from suppliers, and the challenges facing suppliers to meet those demands. Reach out and we can create an action plan for you!
About the Author
Vincent Erasmy is the Carbon Competence Lead at First Climate. In this role, he empowers companies across the globe on their climate journey by translating the latest carbon standards, market insights, and regulatory shifts into actionable strategies. Internally, he leads dynamic projects and trainings that drive carbon expertise within our teams and beyond. Committed to making a measurable impact, he thrives at the intersection of innovation, market leadership, and sustainability transformation.
