In 2009, a group of sustainability experts and companies in the Netherlands formed a collaboration to design a process model that would help businesses to make more sustainable choices. Today, the outcome of this collaborative approach is known as FIRA, a platform with the capability of an expert team to assist both buyers and suppliers with their respective sustainability requirements. In this case study, Lex de Bruijn, Managing Director at FIRA and Peter Potters, Head of Procurement Development at Dutch bank ABN AMRO, one of the initiative's founding partners, talk about what stands behind FIRA, how it helps both buyers and suppliers, and how the model is being rolled out.
Sustainability is a wide topic that, depending on the definition, tends to branch out into many sub-topics, some of which can be governance, labour practice, and human rights, among others. "You simply cannot expect a procurement officer or team to be aware of all these issues and be able to negotiate on it," explains de Bruijn. To address this predicament, FIRA's mission is to become a knowledge broker for companies, or the "Dun and Bradstreet of Sustainability".
For a company like ABN AMRO, which has 800 suppliers in the Netherlands alone, FIRA has proven helpful to address sustainability in a professional and structural way. With the ability to process and record all supplier sustainability data on one system, the data is checked by an expert team to assure the claims are free of greenwashing and audited for gradual progress to on-site implementation and performance auditing.
"Initially the system helps to identify and manage the risk in the supply chain. The challenge then lies in getting and keeping visibility into the sustainability of our full supply base. Our objective is to cover 50% of spend in 2012 under FIRA rating" explains Potters, Head of Procurement Development.
The FIRA validation process ensures that procurement departments, and buyers in particular, can rely on the data and are aware of the performances of their suppliers. Beyond 'cleaning the data of greenwashing', FIRA helps buyers understand what they are getting.
What sets the initiative apart is that it captures data behind certificates and makes it readily available for procurement officers to use when sourcing suppliers. This makes the process of sending out codes of conducts to suppliers a thing of the past.
Buyers can find suppliers to match their specific requirements, and even more, they can compare suppliers within sectors. However, it is important to keep in mind that FIRA is not meant to be a prescriber for buyers. "We don't want to tell ABN AMRO what criteria they should use to buy their IT for example," explains de Bruijn. "Instead, our database creates the transparency to find the information based on the requirements that matter most to ABN AMRO."
"It also requires us to be as transparent with our suppliers", Potters further elaborates.
ABN AMRO received a Bronze status in 2011, and is now in the process of moving up to Silver level with the FIRA system.
"With advanced sustainable suppliers however we look at how we can create shared value. With these suppliers we start projects aimed at improving our own practices and helping them address the sustainability challenges of our commercial clients. This approach results in joint projects where everybody benefits: our suppliers, our clients and ABN AMRO. This way, the network really begins moving away from defensive risk management to collaborating in a constructive way, creating business, as well as lowering environmental footprint." Potters concludes.
When the founding members rolled out the pilot for FIRA in May 2011, they recruited 35 suppliers in the Netherlands to participate. This pilot closed at the end of 2011.
The FIRA system has been so successful so far for ABN AMRO that they are continuing to engage with more of their suppliers. "We are now engaging with the next 60 suppliers across all categories in this process. Next year, we will work towards an even greater coverage. Suppliers that are shown to be immature in sustainability are stimulated to take the next step and move to the level required by us."
FIRA is now in the phase of building more buyer and supplier clients, which is being done in close collaboration with its founding partners. The addition of every buyer leads to an increase in new supplier clients. For instance, with Anglo-Dutch consumer goods giant Unilever recently joining as a client, hundreds of new suppliers will be added into the database. Another advantage of signing clients such as Unilever, who has a global footprint, is the expansion of reach into new markets. Rolling out the model based on this approach is expected to lead to both critical mass and market acceptance.
For further information on FIRA and the ABN AMRO case study please contact; Lex de Bruijn firstname.lastname@example.org