Improving supplier performance on social and environmental factors
When general expectations change
Supplier engagement is relevant whenever organisations expect suppliers to operate differently — not only when problems have already emerged.
This is often the case when companies introduce a new supplier code of conduct, update contractual requirements, or launch a responsible sourcing programme. Expectations are raised deliberately, sometimes across large and diverse supplier bases, and suppliers are expected to adjust how they manage labour, environmental or governance issues as a result.
At that point, engagement helps translate new expectations into operational reality. Suppliers may be willing and capable, but unfamiliar with the intent behind new requirements, how they relate to existing practices, or what is expected in different contexts. Without engagement, new standards risk being interpreted defensively or superficially, leading to inconsistent implementation and poor-quality information from the outset.
Or when individual performance stays behind
Supplier engagement is also relevant when individual supplier performance consistently falls short of agreed expectations.
This typically becomes visible through concrete signals: repeated audit findings that remain unresolved, incomplete or unreliable data submissions, recurring incidents, or complaints raised through grievance mechanisms.
The challenge here is that supplier relationships are often long-standing. Investments have been made on both sides — in tooling, processes, qualifications or market access — and alternatives may be limited or unavailable. In these situations, walking away can create greater operational, commercial or reputational risk than working with the supplier to improve performance.
Engagement then serves as a disciplined way to assess whether improvement is realistically achievable under existing conditions — and, where it is not, to support informed escalation or disengagement decisions based on evidence rather than assumption.
