Iberdrola, a Spanish multinational electric utility company, announced that it will require suppliers representing 85% of its spend to meet Environmental, Social, and Governance (ESG) criteria. The company has set targets for suppliers to meet specific sustainability requirements, around climate change risk, circular economy strategy, human rights due diligence, governance and business ethics.
The company's decision to require suppliers to meet ESG criteria sends a clear message to its supply chain and the wider business community that sustainability is a priority.
By setting specific ESG targets for suppliers to meet, Iberdrola is helping to drive change across the value chain and encourages suppliers to adopt sustainable standards and practices. This initiative is an excellent example of how companies can use their influence and purchasing power to build a more sustainable future.
rather than seeking to exclude companies, its ESG plan aims “to encourage the entire chain to align itself with the company’s principles,” noting that its mechanism for proposing ESG improvements has attracted over 1,000 suppliers that initially did not meet the level of requirement, and more than 77% of suppliers awarded contract in the 2020 – 2022 period meeting the established criteria and following sustainable development policies and standards.