Supply Chain Sustainability: An Imperative of the New-Normal Supply Chain
In a world experiencing the brutal impacts of climate change and a growing array of environmental concerns, supply chain sustainability (SCS) efforts are taking on an increasingly important role.
In our recent post about the new normal for the supply chain, we highlighted the 2021 Council of Supply Chain Management Professionals’ (CSCMP) Annual State of Logistics Report® that revealed factors that will likely impact the future supply chain.
According to the report, one of those factors relates to SCS: “Sustainability efforts by the transportation sector are increasing. Consumers are considering environmental impacts in their purchasing decisions while governments across the globe are instituting more stringent regulations.”
There are many challenges and opportunities within SCS dynamics—as described in The State of Supply Chain Sustainability 2021, a report released in July by the MIT Center for Transportation & Logistics (MIT CTL) and the Council of Supply Chain Management Professionals (CSCMP).
Here, we discuss some key insights from the report, what the authors predict for sustainable supply chains in the years ahead, and a few resources that can support your organization’s SCS efforts.
The State of Supply Chain Sustainability 2021
Defining SCS as “the management of environmental and social impacts within and across networks consisting of suppliers, manufacturers, distributors, and customers in line with the UN Sustainable Development Goals,“ the report offered a number of key insights, including the following.
For many, COVID-19 didn’t seem to slow sustainability efforts.
Over 80% of respondents indicated that “the crisis had no impact or increased their firm’s commitments to SCS.” In fact, 83% of the executives who participated said the pandemic had either “accelerated SCS activity or, at the very least, increased awareness and brought urgency to this growing field.”
Company size played a role.
Momentum for SCS progress appeared to primarily come from large and very large companies. In contrast, small- and medium-sized companies tended to be less engaged before and particularly during the pandemic due to financial constraints.
Pressure to focus on SCS efforts came from multiple sources.
Both internal and external sources applied pressure for companies to support SCS—with that from investors, government, and international bodies increasing the most over the past year.
SCS is a growing business trend.
Internally, executives applied the most pressure in terms of corporate commitments to SCS. Since these leaders play such a critical role in growth strategies, the report authors propose that “the drive toward supply chain sustainability is not a fad but rather a business trend to watch.”
Companies are putting promises into practice in specific areas.
The report also revealed how companies are putting their “promises into practice” in the context of SCS, which included:
Supply chain visibility
Environmental impact development
Across all industries, supplier development was the most common focus, but the report notes that visibility was also important, particularly in manufacturing and transportation.
The Future of Sustainable Supply Chains
The authors of the report also proposed an outlook for the “potential evolution” of SCS over the next five years, which includes:
An expected increase in SCS investments.
Increased scrutiny from various stakeholders to ensure companies are fulfilling their sustainability promises.
If increased scrutiny occurs, there will be an increased need for transparency and disclosure of supply chain activities and practices.
As these dynamics evolve, more supply chain professionals who operate as sustainability champions will be needed “to help companies overcome the many formidable barriers to SCS that lie ahead.”
Additionally, the report identified common SCS impediment “threads,” one of which was “the key role of suppliers in furthering supply chain sustainability.” The challenges in this context are described more fully in “Barriers to Sustainability: Why Suppliers are Part of the Problem and the Solution,” which includes some of the report’s findings.
Investors are also expected to play a growing role since “The connection between companies’ track records in sustainability and their ability to win market share and turn a profit is likely to strengthen.”
Finally, social issues and those related to mitigating climate change are expected to “feature prominently in the future of SCS.”
Quoted in a BlueYonder post that summarized the report, Mark Baxa, CSCMP President and CEO said,
“The report findings are beginning to shed light on how supply chains are becoming increasingly recognized for their impact on a firms’ sustainability objectives and public image. Our members tell us that now, more than ever before, that the very notion of embedding sustainable practices from within their company’s supply chain delivers real, tangible results. Competing in today’s global marketplace is not just about the high-quality products supply chains plan, procure, make and deliver. It’s about doing the right things right for the whole of society.”
Supply Chain Sustainability Resources
There are many initiatives supporting SCS efforts, like MIT Sustainable Supply Chains and CDP.
Launched in 2018, MIT Sustainable Supply Chains is an initiative of MIT CTL that serves as “an umbrella program that brings together our sustainability research, education, and outreach. Our goal is to connect research outcomes to practical settings, enabling companies and stakeholders to leverage supply chains as a beneficial force to reaching global sustainable development goals. We seek to improve visibility of supply chain impacts and develop strategies to help reduce them, so companies can better address consumer, political, and shareholder concerns.”
CDP “is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. Over the past 20 years we have created a system that has resulted in unparalleled engagement on environmental issues worldwide.”
Noting the global nature of sustainability challenges, CDP also offers a network of “accredited solutions providers” to “support companies on their journey to environmental leadership.”
This CDP 20th anniversary video provides an overview of the organization’s work and its impact.
How CLN Worldwide is Embracing Sustainability
At CLN Worldwide, we have a strong commitment to sustainability, leveraging our proprietary dashboard to streamline your supply chain while minimizing your carbon footprint.
We also believe that your business's lack of supply chain optimization could lead to stagnant growth and a decline in potential profits. We understand that supply chains and logistics management can be a complex and daunting task to undertake. That's why we developed fluid strategies and customized services that removes the nuanced guess work and solves your logistics clogs.
Here's how it works. You schedule a call with us, we will analyze the current market you're navigating, and then create an effective supply chain strategy that we will then integrate and execute together.
Call us today, so you can stop wasting your time with regulatory delays and start trusting the efficiency of your supply chain to scale your business.