The ethical ecosystem: are your partners and suppliers as sustainable as you are?

A sustainable approach to business and a focus on environmental, social and governance (ESG) factors are now extremely important to commercial success. If you aren’t that kind of organization, you risk other companies not wanting to work with you and losing talented employees. As business ecosystems become increasingly essential, is it time to ensure your own ethical stance extends to the partners and suppliers you work with?

Recent times have seen business taking place more and more against a backdrop of increased emphasis on sustainable business and drives towards carbon neutrality. More and more companies are pursuing carbon-neutral initiatives, both because it’s the right thing to do and because it has become an important commercial driver. But when your business can only thrive based on the quality of the ecosystem and number of partners you work with, shouldn’t you ensure they all meet the same standards? And how can you do that?

The enterprise ecosystem challenge

Many large companies in Australia and New Zealand operate in the mining industry and, as such, work in big ecosystems made up of industrial partners. Extraction company operations will typically comprise: huge vehicles used for getting ore out of the ground, the diesel to fuel them, the explosives used for site work, trains used to transport ore to ports, the ships that transport it, and more. It’s a lot of partners and suppliers in one ecosystem. They also typically use centralized systems like Supervisory Control and Data Acquisition (SCADA), Manufacturing Execution Systems (MES) or Energy Management Systems (EMS), again supplied by third parties.

There’s been significant movement towards more sustainable business by mining companies in recent times. It is good to see that companies like BHP and Rio Tinto are partnering on alternative fuel and carbon-neutrality initiatives, leading the way for the global mining sector. These projects have goals in line with the Australian government’s Net Zero Momentum Tracker, itself based on the UN Paris Climate Change Accord targets.

The tracker highlights Scope 3 emissions in particular, which are defined as emissions that are the result of activities from assets not owned or controlled by the reporting organization. This means the downstream use of commodities and products, and these typically account for 80% or more of a resource company’s total emissions. That means your ecosystem partners.

Business incentives are driving sustainability

Companies aren’t pursuing carbon neutrality and ESG initiatives out of any sense of checkbox compliance. There are commercial incentives and moral imperatives behind it, and it’s a shared value opportunity. As Harvard Business School summarizes it, you both “Do well” and make money, and “Do good” by addressing social and environmental problems at a corporate level.

According to McKinsey, companies with high ESG ratings consistently outperform the market in both the medium and long terms. It’s good for your brand but also for your organization in general. An EY study found that 89% of executives believe purpose in your organization drives greater employee satisfaction. 85% of people say they’re more likely to recommend a company with strong purpose to others. 83% of Generation Z, the next generation of workplace talent, consider a company’s purpose and ESG when deciding where to work.

Furthermore, in the recent Orange and Longitude report, Real-time intelligence and the future of supply chains, 78% of respondents said they believe that sustainability has become a primary way to drive product or service innovation. A further 80% are investing in digital technologies to become a more sustainable business.

Can you ensure sustainability in your ecosystem?

It is one thing for you and your company to be committed to a sustainable future, but what about those you choose to work with? That is to say, if companies are setting ambitious carbon-neutrality and sustainability goals for themselves, should they expect the same commitments from partners in their supply chains? It’s something that I’ve thought about a lot, partly because we work with mining companies that have such extensive networks of partners in a traditional industry that is trying to transform. There’s a lot to factor in.

Sustainability is increasingly becoming a corporate focus, whether you’re in mining or any other industry, really. At Orange we have responded to requests for tenders where you are required to demonstrate your carbon neutrality. And this is an extreme example, but suppliers are often required to undergo audits for modern slavery and human trafficking to prove they are an ethical company in that regard. Might that be extended to sustainability and ESG in time? Could companies put charters in place whereby they insist on only working with other ethical companies?

Commitment can – or should – go beyond your own house

The Orange Engage 2025 strategic plan commits us to being a net-zero company by 2040, and we’re also focused on improving energy use in our buildings and transport systems. We also want to ensure the energy efficiency of our networks through a Green IT & Networks initiative. The plan will optimize technical deployments, increase the eco-efficiency of data centers and reduce the energy used by routers. We’re also employing circular economy tactics, using reconditioned equipment in networks and data centers.

Beyond this, though, we also try to ensure that we work with companies that share our values. An ecosystem is stronger when all its members are of one mind and are pulling in the same direction. 85% of companies told us that their business is investing to become more sustainable, which includes new data collection technologies to give better insights into sustainability metrics and managing energy usage better. These are the types of commitments you want to see when choosing partners to work with in your ecosystem.

Andrew Borthwick
Andrew Borthwick

Andrew Borthwick has been with Orange since 2018, when he joined as Head of Consulting for Australasia. Since then he has been Head of Sales Australasia, and today he leads Orange Australia and New Zealand business forward as General Manager. He has extensive experience in customer engagement, sales leadership and delivering revenue growth and has worked with some of the world’s largest companies. Outside of work, Andrew is married with two young boys and has a great passion for health and fitness, travel, technology and the occasional glass of red wine.