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We have been covering this topic before, and to underline the importance of the subject we would like to share some key points from digital content strategist David Luther. Let´s start with some statistics to convince you that this is also for you!
- Demand: Nearly half of consumers say they would change purchasing habits to reduce their impact on the environment, according to Nielsen.
- Environmental impact: The supply chain accounts for more than 90% of most consumer goods companies’ environmental impact, according to McKinsey & Company.
- Societal risk: The U.S. Department of Labor listed 148 types of goods from 76 countries produced by child labor or forced labor in 2018, when it released the Comply Chain app to help American businesses eliminate child labor from their supply chains.
- Data systems: A 2019 survey by the Carbon Disclosure Project (CDP) found that 65% of its corporate members used environmental metrics to inform supplier management and hold their business partners accountable to supply chain sustainability goals.
- Progress: CDP has reported promising progress in cutting greenhouse gases: In its 2019 survey, 29% of 7,000 suppliers to some of the world’s largest corporations reported a decrease in emissions.
So, how to approach this in a practical and responsible way?
Well, many companies around the world have taken steps to lower their carbon emissions, cut back on waste and improve labor conditions. By tracking sustainability metrics in supply chain management (SCM) systems, they monitor multifaceted programs that, for example, prioritize renewable energy, recycle products and materials or encourage greater social responsibility among suppliers.
Additionally, companies can use intelligence and pre-defined rules to ensure that products aren’t being shipped unnecessarily—for example, making sure products are sent from the closest distribution or production center as opposed to one on the other side of the world.
This is where Combi Works can play a vital part of helping you achieve these goals in the easiest possible way.
For example, lack of visibility into the supply network is one of the biggest challenges to supply chain sustainability, particularly because businesses usually work with suppliers in multiple tiers. Many buyers have direct relationships with their Tier 1 suppliers and contract manufacturers. Those Tier 1 companies’ suppliers and subcontractors, in turn, are Tier 2 suppliers. And those subcontractors may be working with mines, farms and other providers of raw materials that fall into Tier 3.
Companies recently surveyed by Ernst & Young expressed a lack of transparency into the operations of any partners beyond Tier 1 . Some buyers lean on their Tier 1 suppliers to cascade sustainable practices onto the Tier 2 companies, the Tier 2 suppliers to monitor the practices of Tier 3, and so forth.
In the development of the Combi Works platform, full transparency has been one of the most important issues to adress., throughout all the Tiers...
Supply chain sustainability benefits not only companies’ own interests and those of their stakeholders but also society and the planet at large. Companies have realized that climate change, for example, can put their business continuity at risk with extreme weather disruptions and growing resource scarcities. As we also have seen during the pandemic.
So why should you look into the challenges och sustainable SCM? Well - for example - YOU HAVE NO CHOICE! Those who are not there in the nearest future will not be in the race. Let´s have a look at why:
- Branding: Consumers are more concerned than ever about where products come from and how they’re produced. Researchers at MIT’s Sloan School of Management found that consumers may pay 2-10% more for products that provide supply chain transparency.
- Investor relations: Institutional investors are keenly aware of the reputational risk of unsustainable supply chain operations. In recent years, the media has reported many irresponsible supply chain practices, and in some cases, it’s hurt a given company’s stock prices. These accounts have revealed businesses sourcing electronics from overseas, maintaining hazardous working conditions, using suppliers that routinely polluted local rivers, and procuring defective components or toxic materials. It’s also worth noting that nearly half of investors in a recent Gallup poll expressed interest in sustainable investment funds.
- Corporate culture: Millennials, in particular, seek greater purpose in their work, according to demographers. Successfully hiring and retaining employees often depends on a company’s corporate culture and values, and sustainability plays a key role in that.
- Compliance: Governments around the world are mandating greater supply chain sustainability, in part to meet the United Nations’ 2030 deadline for achieving Sustainable Development Goals, like clean water for all. Government regulations cover many areas, including the traceability of pharmaceuticals, disposal of electronics and avoidance of conflict minerals.
For more information on how to achieve sustainable SCM...well, you know where to find us 😉