Tim Hopper is responsible for the social and environmental activities of Microsoft’s indirect spend suppliers. Tim is a member of the International Association of Outsource Professionals (IAOP) Corporate Social Responsibility committee, the Global Business Coalition against Human Trafficking (gBCAT) supply chain subcommittee, Made in a Free World, and the Rockefeller Foundation stakeholder group to promote Global Impact Sourcing. He is also a member of the Global Sourcing Council. Tim deployed and currently manages the Microsoft Supplier YouthSpark Community Technology Center Program. Tim also serves on the board of DreamStart Labs, an NGO focused on empowering disadvantaged individuals through technology.

Christopher P. Skroupa: What are the trends and expectations related to Responsible Sourcing?

Tim Hopper: The biggest trend is the increasing expectations from stakeholders. We’re seeing more enterprise customers assess their suppliers’ — both direct and indirect — environmental and social policies and performance, usually through surveys. Their assessments probe whether their customers’ suppliers have contractual ESG requirements — good environmental, social, governance policies — and if they perform compliance activities, including risk assessments, surveys, scorecards and site audits. There is also an increase in expectations that sustainability will be embedded into their purchasing decisions. Investors’ expectations are also increasing, with their company surveys also heavily focused on due diligence ESG compliance activities.

Skroupa: What are the key differences between applying Corporate Social Responsibility (CSR) evaluation to direct suppliers versus indirect?

Hopper: We see the key differences in volume of suppliers and in the sector diversity for indirect suppliers. Indirect suppliers are typically comprised of many companies across multiple sectors, some with unique material ESG risks. Understanding the relevant risk for indirect suppliers requires a thoughtful risk assessment approach that reflects the sector and commodity risks prior to engaging suppliers. When considering the volume of suppliers, it’s also key to develop assessment approaches that can scale to meet the necessary volume.

Skroupa: How do partnerships and collaborative standards help you realize sustainability goals?

Hopper: Partnerships are critical on the indirect side, due to the volume and sector diversity. The best and perhaps the only way for procurement professionals to effectively address sustainability among their supply base is to leverage the best information available in the marketplace at the time. This can only be achieved through partnerships and standards.

Skroupa: What are the specific drivers that catalyzed the need for a Committee on Supplier Ratings?

Hopper: I’d say that much of what we’ve just discussed represents these driving factors. Firstly, more and more public and private purchasers are increasing their due diligence with regard to their supply chains; investors are also paying increasing attention to their company investments. In addition to compliance activities, companies are promoting sustainability in RFx events and other areas. This increased attention on sustainability is welcome, but also it is increasingly causing “survey fatigue” and creating inefficiencies in the marketplace. That led a number of us to ask — for indirect suppliers in particular, without a factory to audit — what if instead of leading with our questionnaires, we consumed the best sustainability information in the marketplace? And further still, why not encourage suppliers to engage these best practices to share not only with us, but with their other stakeholders? If we could do this, we could radically reduce the inefficiencies that currently exist and help companies focus on impact.

Skroupa: What values/benefits would be achieved through your Committee on Supplier Ratings initiative?

Hopper: We believe that we will increase our sustainability impact through the insights of established sustainability experts, rather than every procurement department struggling to build this competency on its own. We’ll also develop a scalable approach where small procurement departments will be able to incorporate sustainability with thousands of companies (versus hundreds) at a reduced cost, not only for them, but also for their suppliers who have had to respond to surveys.  Finally, we think this approach developed with multiple stakeholders will have more authentic credibility with our customers and investors than a one-off approach.