Supplier-buyer cooperation as part of climate management

Abstract

Climate change is one of the most impactful global phenomena of our lifetime affecting the environment, human lives, and business. To limit global warming, the policymakers are tightening sustainability policies demanding companies to take more responsibility for the value chain. To tackle this, companies have set ambitious climate strategies and targets. These targets are aiming to lower direct and indirect greenhouse gas emissions covering the value chain. However, as low-hanging fruits have been collected in the climate work, companies need to expand the context of their climate work to include the value chain. Although companies have started to include value chain in their sustainability commitments, this has not yet materialised in the sustainability work in practice. According to Global Supply Chain report 2022, most companies do not yet include their supply chain in the climate work (CDP 2023).

The main objective of this study was to create a supplier-buyer cooperation model for climate-related issues. The cooperation model was created for a commissioner which is a large international food and multiservice provider with an ambitious climate strategy. To create the model, the commissioner’s suppliers were interviewed to understand on how to promote a closer supplier-buyer cooperation in climate-related issues. In addition, the commissioner’s environmental management system, ISO 14001, was taken into account in the solution development.

This thesis is based on a qualitative study utilizing a case study approach. The commissioner’s eight suppliers were interviewed by using a semi-structured theme interview method. The data was analysed with inductive thematic analysis, which involved identifying drivers and benefits of supplier-buyer cooperation, elements of good cooperation and ideas on what cooperation could be in practice.

The findings showed that supplier-buyer cooperation can enable suppliers to obtain customer insight, influence the buyer and procurement criteria, and help the suppliers to differentiate from their competitors. In addition, cooperation with suppliers can help buyers to achieve their sustainability strategy and objectives, attain expertise on industry-specific sustainability issues and gain understanding on environmental impacts, risks, and opportunities. Furthermore, the cooperation can create a meaningful relationship between the business partners in which shared values such as trust, fairness, and openness play an important role. This enables continuity and security during unpredictable times for both.

The supplier-buyer cooperation model for sustainability was created for long-term partnership. The cooperation model is constructed based on continual improvement using ISO 14001’s Plan Do Check Act -procedure. Thus, the annual planning for cooperation is conducted by setting targets and plans, implementing the plan, and finally evaluating the outcomes and updating the plan. In the model, suppliers and buyers have an active role with a shared vision for cooperation. The form of cooperation depends on the parties’ sustainability strategies, capabilities, and motives. Furthermore, trust, fairness and openness are keys for fruitful cooperation.