Salesforce is integrating sustainability into its supply chain by asking suppliers to agree to certain principles laid out in its new Sustainability Exhibit. The company recommends that suppliers collaborate with their corporate sustainability teams to review the guidelines in the Sustainability Exhibit, as they will become part of its procurement contracts moving forward. If suppliers breach the agreement, they will be charged a fee for climate remediation.
The four-page document, which includes setting science-based targets to reduce greenhouse gas emissions, will help suppliers reduce their carbon footprint while also helping Salesforce to integrate sustainability into every aspect of its supply chain, the company says.
The agreement requires that suppliers maintain a Sustainability Scorecard, and includes a description of potential “climate breaches.” If suppliers are unable to resolve the climate breach to Salesforce’s satisfaction, the supplier must pay a Climate Remediation Fee to purchase offsets or fund tree planting. The fee is “not a penalty,” according to the agreement. Rather, it is a reasonable amount to help mitigate or counteract the breach, otherwise “obtaining an adequate remedy for such Climate Breach would be difficult or inconvenient,” Salesforce writes.
Managing supply chain sustainability is an increasing necessity, companies are finding. A recent research report from CDP suggested that companies face up to$120 billion in costs from environmental risks in their supply chains by 2026.