Handling Supplier Engagement for CBAM Compliance and Beyond

In the evolving landscape of sustainability regulations, particularly under the Carbon Border Adjustment Mechanism (CBAM), effective supplier engagement has become indispensable. This post explores how robust engagement not only helps to meet CBAM requirements but also enhances supply chain sustainability and economic viability.

4 minutes read

Supplier Engagement for sustainability: why Primary Data matters

Accurate primary data collection is central to CBAM compliance. By Oct 2024, with the 3rd CBAM report due, companies are no longer allowed to use default values; CBAM reports from then on need to be based on primary data provided by their suppliers. With only a few months to go, companies now need to engage their suppliers to be able to provide accurate and compliant primary data before October. 

Whilst collecting primary data is an urgent necessity for CBAM compliance, establishing strong data-informed supplier collaboration also promises long-term strategic advantages. 

Having streamlined communication and cooperation practices with suppliers enables companies to implement collaborative initiatives aimed at environmental and operational improvements. Primary data enables companies to identify emission hotspots within the supply chain, therefore serving as the foundation for developing informed mitigation strategies. 

Our sustainability experts therefore recommend investing in robust supplier engagement strategies and streamlined primary data collection to simplify collaboration for compliance and future initiatives. 

Overcoming Data Collection Challenges

Obtaining precise and compliant data from suppliers is fraught with challenges. Most companies lack the established processes necessary for managing supplier communication effectively on a large scale, as well as the resources needed to educate suppliers and encourage their collaboration. With the pace of change accelerating, there really is no time to send explanations, reminders, and spreadsheets back and forth. 

There are suppliers that may not fully understand the importance and intricacies of CBAM-specific data collection or the unique requirements of CBAM data, which differ from standard GHG protocols. Additionally, the varied capabilities and resources among suppliers make data harmonization and verification particularly challenging. 

Technological solutions to streamline communication and collaboration across the supply chain help companies manage their supplier engagement faster, at scale, and less prone to errors. 

Any company that has to comply with CBAM reporting should rethink its existing processes for supplier communication and collaboration and establish methods to streamline supplier engagements and educate them about CBAM requirements.

3 Steps for Successful Supplier Engagement  

  1. Streamline supplier communication
    Digital supplier engagement tools offer innovative solutions that simplify interactions and data collection processes. 
    carbmee's Supplier Engagement Feature enables mass onboarding of suppliers, centralizing all supplier data into one single system to easily monitor and track data. It significantly cuts communicative efforts on both ends and automatically safeguards the quality of the data provided.
  2. Simplify Primary Data Ingestion 
    Filling out extensive sheets is prone to manual errors and complicates updates. Software solutions for data collection not only reduce the administrative burden on suppliers but also enhance their ability to comply efficiently, facilitating smooth collaboration between companies and their diverse supplier networks.
    carbmee offers two options for uploading data into EIS to accommodate different supplier capabilities:
    - Pre-built Models: Suppliers can input data directly into easy-to-use, pre-configured templates, minimizing errors and ensuring consistency.
    - EU Excel Sheet Uploads: Suppliers who already have completed the necessary EU documentation can upload it directly, integrating seamlessly into the system.
  3. Facilitate Compliance through Education and Support
    Ultimately, the responsibility for ensuring compliance with CBAM reporting requirements rests with your company. Assist your suppliers by offering the necessary education and support.
    To encourage and enable suppliers to fulfill new emission reporting requirements, carbmee offers:
    - In-Tool Education and Tutorials: These resources provide clear guidance on what data is needed and how to submit it correctly, simplifying the process for experienced suppliers, as well as for those who do not have any emission reporting practices yet.  
    - Supplier Engagement Manager: A dedicated manager provides personal support, helping onboard suppliers and addressing any queries during the process. Though carbmees supplier engagement tool in itself is already comprehensive, at times, the blockers for fast success are all about people and processes. With this complimentary supplier engagement service, you will get CBAM-compliant data on time. 

The Strategic Advantage of Enhanced Supplier Engagement

As regulatory frameworks like the CBAM become more stringent, the ability to engage suppliers effectively becomes an operational requirement. Companies that leverage advanced technologies and comprehensive support services like those offered by carbmee can not only meet compliance demands more efficiently, but also forge stronger, more collaborative relationships with their suppliers. In an era of disruption, strong supplier engagement helps companies foster a resilient supply chain, capable of adapting to new challenges swiftly and effectively.

Are you ready to simplify your CBAM compliance process? Explore how carbmee can transform your supplier engagements and streamline your data collection efforts.

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Graph illustrating emissions data collected from suppliers for CBAM reporting