Your suppliers are resisting sustainable energy. How will you overcome their opposition?
When your suppliers push back against adopting sustainable energy, it's vital to address their concerns effectively and collaboratively. Here's how to approach this issue:
How do you handle supplier resistance to sustainable initiatives? Share your strategies.
Your suppliers are resisting sustainable energy. How will you overcome their opposition?
When your suppliers push back against adopting sustainable energy, it's vital to address their concerns effectively and collaboratively. Here's how to approach this issue:
How do you handle supplier resistance to sustainable initiatives? Share your strategies.
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One of the solutions would be just stop trying. If they are not a forward thinking group, start looking elsewhere. A lot of times over trying is hurting your brand and your good intentions. Move on ...
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Overcoming Supplier Opposition to Sustainable Energy: I. Engage & Educate 1.Schedule meetings 2.Provide education/training 3.Share success stories II. Address Concerns 1.Cost: Explore savings opportunities 2.Technical: Collaborate on solutions 3.Supply Chain: Develop sourcing plans III. Collaborate & Incentivize 1.Joint goal-setting 2.Offer incentives/rewards 3.Collaborative problem-solving IV. Monitor & Evaluate 1.Track progress 2.Evaluate effectiveness 3.Adjust strategies V. Lead by Example 1.Demonstrate commitment 2.Share your journey
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To address supplier resistance to sustainable energy: Engage Suppliers: Understand their concerns (e.g., costs, expertise) and emphasize long-term benefits like efficiency and savings. Provide Support: Offer training, technical guidance, and resources to ease their transition. Incentivize Change: Use grants, financial aid, and preferential contracts to encourage adoption. Set Standards: Integrate sustainability requirements in contracts and collaborate with industry peers to align expectations. Showcase Success: Highlight case studies of suppliers achieving cost and efficiency gains through sustainable energy. Phase Transition: Roll out changes gradually, starting with pilot programs to build trust.
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Customers love answers and current examples of use cases. Inundating people with numbers and percentages is a path and depending on how you read your audience it could work. However lead with what has worked recently for the big names-the sophisticated players. It’s an easier sell as the due diligence effort is parked in the mind of your customers with the big name-sophisticated player who went ahead. “Good for him - well it’s good for me”.
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Any sustainable energy requirements need to be specified as requirements in supply specifications. This includes: 1. Production & delivery of energy compliant to harmonized standards. 2. Bench mark the Carbon footprint (CF) for each Btu of energy generated and introduce incentives for sustainability improvements periodically. 3. Insist on use of environmental friendly consumables for production & delivery of energy. 4. Include CF as a vital parameter for periodic vendor assessment. 5. Make sustainability measures as your company management objective and impart awareness within your organization as well as to your approved vendors.
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Understanding supplier segmentation is crucial when addressing critical initiatives. For strategic suppliers, we can consider joint investments under a profit-sharing model over the long term. When dealing with leveraged suppliers, it’s a matter of comply or perish—they will comply if they value me as a customer. I prefer not to engage with bottleneck or non-critical suppliers.
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Massimiliano Cervo
Project Finance Expert | Energy Specialist | Keynote Speaker on Energy Transition
I would create a coalition of suppliers, offering financial incentives such as cost savings and long-term contracts for those suppliers going green. Also, share with the suppliers data on cost savings and market trends that favor sustainable developments. Such coalition could help suppliers find green financing and technical expertise to facilitate the transition. In my experience we need to set standards of sustainability for future contracts. The trend I see is that some investors are divesting from suppliers that are not willing to adapt, especially those that have implemented ESG reporting frameworks.
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To stop the losers missing the trajectory to sustainability, buy from the new winners. In my case this year, plans to buy from an innovator weaved its way onto the critical path and we've paid several thousand dollars of unanticipated interest charges. On the first ones, we are paying more. Next time we will scale up, and knowing what we know now, we will be money ahead by then. Well worth it!
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1) Spreading awareness on sustainable energy 2) Exploring advantages of Carbon-free energy 3) Emphasize long-term benefits like efficiency and savings 4) Proper Training to employees and suppliers 5) Exposure to International Environmental laws and Standards 6) Meeting the Vision and Mission of the company for sustainability goals
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Overcoming supplier resistance to sustainable energy starts with clear communication of the benefits, such as cost savings, regulatory compliance, and enhanced reputation. Build partnerships by offering support like technical guidance or shared investment in sustainable practices. Highlight competitive advantages, showing how sustainability opens doors to new markets and clients. Engage them in discussions to understand their concerns and address them collaboratively. Gradually introduce changes through pilot projects to demonstrate success and build trust.
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