AT&T Hardwires Sustainability into its Supply Chain

This content originally appeared on IndsutryWeek.com

By: Chris Tsai, executive director big data, M2M at AT&T

The supply chain offers meaningful opportunities for companies and their suppliers to improve sustainability performance. For a company like AT&T, the supply chain can be viewed as a massive web connecting companies from across the globe. We spend tens of billions of dollars with tens of thousands of suppliers each year on a wide range of products and services such as cellphones, network equipment and outside plant construction. Given its reach, the supply chain provides a significant opportunity to streamline operations and reduce long-term costs while simultaneously limiting our environmental impact and positively influencing society.

Our current focus areas in sustainability include: greenhouse gas emissions, human and labor rights, conflict minerals, lead acid batteries, energy efficiency, sustainable packaging, water, recycling, diversity and ethics. When we stepped back and looked at these focus areas holistically we knew that engaging our suppliers was going to be key to moving the needle on these issues. To this end, we incorporated a sustainability clause into our new supplier contracts to ensure that we can engage our suppliers on sustainable best practices.

While many of our suppliers have well developed sustainability programs, others view sustainability as a relatively new idea. Thus,we have driven progress in three incremental phases: awareness, assessment, accountability and action.

As a first level of engagement, in 2008-2009, the supply chain team established a high-level set of citizenship and sustainability principles of conduct for suppliers to follow that are oriented towards awareness and alignment to AT&T’s broader objectives.

Once we communicated our expectations, we wanted to understand how our suppliers were performing against them. In 2009, we rolled out an annual supplier citizenship and sustainability self-assessment survey aimed at helping us gauge the level of awareness and maturity of sustainability issues within our major suppliers’ cultures and operations. These suppliers account for most of our procurement expenditures, and we incorporate their information into our overall supplier performance measurement process.

We also work with the Carbon Disclosure Project (CDP) Supply Chain Initiative. Ecodesk is another system that we just started using to help achieve our sustainability goals in the supply chain.

Our Sustainability Scorecard is the primary tool that we use to drive accountability with our strategic suppliers. It is populated with information gathered from the AT&T Supplier Sustainability Survey. The scorecard helps us to evaluate suppliers’ performance and progress, and factors into the overall supplier evaluation process that also addresses elements such as quality, reliability and timely delivery.

The sustainability scorecard encompasses four areas to help quantify suppliers’ sustainability efforts: scope of company policies, rigor of goals, transparency of reporting and supply chain governance.

To keep ourselves accountable to working with our suppliers on these issues, we have set two goals:

1. By the end of 2015, a majority of spend with strategic suppliers will be with those who track greenhouse gas (GHG) emissions and have specific GHG goals.
2. By the end of 2017, achieve an average score of 80 percent for top suppliers on the balanced Citizenship and Sustainability (C&S) Scorecard.

Through all of our efforts, our strategic sourcing teams have been an important part of broad-based supplier engagement. To extend the success we have experienced in supplier diversity, we are currently training our contract managers on our core issues and priorities in sustainability. Contract managers work daily with internal and external clients and can help bring sustainability initiatives into sharper focus on a broad front.

By teaming with our contract managers, we are confident that we will see even more attention, alignment and action from our suppliers. Our work thus far has been to create awareness, accountability and action, but training is only one element; we also prepared the proper tools to benchmark and assess our efforts.

Through our supply chain sustainability efforts, we are getting smarter to serve our customers better and ensure that the values of our suppliers match those of our own company. The enthusiasm of our employees and the active engagement of our suppliers are helping to turn supply chain-related risks into opportunities and to improve our company’s environmental and social contributions to our communities and the world.