In the real world
Key points for companies
Companies can incentivize suppliers to engage in L/JIs in several ways. Upstream companies can work directly with suppliers in the context of an L/JI. Downstream companies can use preferred sourcing and other incentives that send market signals through the supply chain. All companies can give public recognition and visibility to suppliers, tailored to the audiences that matter most to them. Whatever approach is used, companies should consult with suppliers to clearly convey their own motivations and learn which incentives and supports are most attractive.
Upstream companies can work directly with suppliers in the context of an L/JI. Downstream companies can use preferred sourcing and other incentives that send market signals through the supply chain.
External conditions that improve likelihood of success
- A prerequisite for effective engagement is an in-depth understanding of supplier interests, options, and constraints in relation to L/JIs. Downstream companies need to understand linkages among supply chain partners to identify the best engagement strategies across the chain.
- Good relationships and open lines of communication with supply chain partners can help companies engage suppliers in L/JIs.
- Well-coordinated company teams that link procurement, contracting, sustainability, and communications in order to develop and implement effective supplier engagement strategies.
The business case for this intervention
- Companies can only advance L/JIs as a strategy to meet their own deforestation/conversion-free commitments if suppliers willingly and effectively participate.
- Companies with strong leverage over suppliers can achieve significant results with limited investment; others can promote and coordinate participation in the L/JI in ways that enhance leverage and incentives.
- Sharing recognition with suppliers benefits both supplier and purchaser, and strengthens companies’ credibility as they publicize their sustainable sourcing commitments.