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Supply Chain Industry Updates

How to Turn Sustainability into a ‘Habit’ for Your Company

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Pandemic-related disruption put the supply chain on the radar of both business executives and consumers in 2020. Environmental concerns are likely to keep it on the radar long after COVID-19 has been controlled.

As the World Economic Forum and Boston Consulting Group noted in a recent report, eight industries’ supply chains — including food and consumer goods — account for 50% of carbon emissions around the world. “Engaging an often-fragmented supplier landscape is challenging — especially when emissions are buried deep in the supply chain, or when addressing them might require collective action at the industry level,” the report’s authors acknowledged.

And yet, driven by concerns about climate change and other environmental threats, consumers, governments and non-government organizations (NGOs) are likely to continue to pressure organizations to reduce emissions. This will force companies to come to the grips with the facts that “the supply network for a typical consumer product accounts for more than 80% of the associated greenhouse gas emissions and more than 90% of the associated impacts on air, land, water, biodiversity and geological resources.” Those were numbers from a separate study recently summarized in an article published by the Association for Supply Chain Management (ASCM).

The study’s authors offered six best practices to make the supply chain more sustainable:

  • Relocate suppliers in the network — “Businesses with fewer intermediate links between them and their suppliers are in a better position to learn environmental data faster and with fewer filters or constraints,” ASCM said. 
  • Reevaluate suppliers in the network — Are your supply chain partners attempting to improve their environmental practices?
  • Account for a broader array of stakeholders — This can include employees, customers, suppliers, industry leaders, communities, activists, government agencies and NGOs.
  • Collaborate with suppliers — “Research has shown that network learning can effectively complement and sometimes even substitute for an organization’s own lack of technological or managerial experience,” ASCM quotes the study’s authors as noting.
  • Communicate with the entire workforce
  • Incentivize management to engage employees

“Incorporating environmental innovations into every task that employees carry out will increase the likelihood that those practices will become integrated into the jobs of everyone within the organization,” ASCM said. “Widespread adoption will potentially make environmental sustainability — and disclosure — an administrative habit.”

The study cited by ASCM, “Administrative Environmental Innovations, Supply Network Structure and Environmental Disclosure,” can be accessed here.

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