There are many ways of combating climate change and ensuring environmental sustainability. One of the less-talked about subjects is ‘supply chain sustainability’.
The term itself might sound obvious, but the issue is not as simple as it might sound. There’s a definition too, if one were to go by how the subject is described as on Wikipedia:
‘Supply chain sustainability is a business issue affecting an organisation’s supply chain or logistics network in terms of environmental, risk, and waste costs. There is a growing need for integrating environmentally sound choices into supply-chain management. Sustainability in the supply chain is increasingly seen among high-level executives as essential to delivering long-term profitability and has replaced monetary cost, value, and speed as the dominant topic of discussion among purchasing and supply professionals. A sustainable supply chain seizes value creation opportunities and offers significant competitive advantages for early adopters and process innovators.’
There’s a more ‘business-like’ definition too, that was propounded by Craig Carter and Dale Rogers of the College of Business Administration, University of Nevada in 2008. Writing in the International Journal of Physical Distribution & Logistics Management, they defined sustainable supply chain management as “the strategic, transparent integration and achievement of an organisation’s social, environmental, and economic goals in the systemic coordination of key inter-organisational business processes for improving the long-term economic performance of the individual company and its supply chains”.
It is the Carter-Rogers definition that has considerably explained how supply chain sustainability should be met in an organisation.
But then, it’s a subject area that is slowly gaining prominence, the operative word being “slowly”. If it’s a question about trends, some indicators are available in the ‘Sustainable Supply Chain Trends 2015’report just published by Ethical Corporation. The report features insight from 415 CSR and supply chain professionals primarily based in Europe, North America and Asia Pacific.
None of the numbers are on the higher side as yet, indicating that something is still amiss somewhere. The drawbacks were pointed out earlier this year in a study released by CDP, the international NGO formerly called Carbon Disclosure Project, and Accenture.
The report Supply chain sustainability revealed: a country comparison revealed that lack of preparation is currently leaving supply chains in Brazil, China, India and the United States more vulnerable to climate risks than those in Europe and Japan. The research was based on data collected from 3,396 companies on behalf of 66 multinational purchasers that work with CDP to better understand and manage the environmental impacts of their supply chains.
The CDP-Accenture report revealed more international trends:
So, what can be the way out?
This was charted out in another study that was produced by the World Economic Forum (WEF) in collaboration with Accenture. The report Beyond supply chains: Empowering responsible value chains, released in March, identified 31 proven practices to help companies achieve a “triple supply chain advantage” of increased revenue, a reduction in supply chain cost and added brand value. The practices also help companies shrink their carbon footprint and contribute to local development, including the health, welfare and working conditions of the communities in which they operate.
There are some other documents that can help one get started: