Five Ways Businesses Can Achieve Supply Chain Sustainability

Five Ways Businesses Can Achieve Supply Chain Sustainability
By: Nathan Hew & Aaron Raj

Achieving sustainability in business, particularly within the supply chain, is a challenging task. Organizations face difficulties due to disruptions caused by the COVID-19 pandemic, the Russia-Ukraine war, and the US-China trade war. However, organizations are still committed to achieving supply chain sustainability. In recent years, more multinational corporations like BMW, IKEA, and Apple have committed to working exclusively with suppliers that meet social and environmental standards. The aim is to ensure the adoption of sustainable practices throughout the entire supply chain.

Governments and business leaders, including those from major consumer companies, are calling for significant improvements in sustainability performance. The Paris Agreement, reached by 196 countries in 2015, aims to reduce global greenhouse gas emissions enough to limit global warming to below two degrees Celsius. On World Environment Day, the United Nations urges industries to find solutions for plastic pollution, with supply chain sustainability being one approach. By focusing on supply chain sustainability, organizations can have better visibility and control over their materials. The United Nations states that in order to limit global warming to 1.5°C this century, annual greenhouse gas emissions must be halved by 2030. Without action, air pollution exposure will increase by 50% within the next decade, and plastic waste entering aquatic ecosystems will nearly triple by 2040.

Tech giants such as Dell Technologies and Microsoft are already taking significant measures to address carbon emissions throughout their value chains. Dell Technologies has set ambitious emissions goals for 2030 and aims for net-zero greenhouse gas emissions by 2050. They also plan to use recyclable or reusable materials in all products by 2030. Microsoft aims to be carbon negative by 2030 and plans to remove all the carbon they have emitted since their founding from the environment by 2050.

However, a survey by EY reveals that while many executives have long-term sustainability goals for their supply chains, few have the necessary visibility, technology, and comprehensive programs to measure progress. Challenges include upfront costs and a lack of a clear business case to support sustainability efforts. The survey involved 525 large corporations from Argentina, Brazil, Canada, Mexico, and the US across various sectors, including retail, consumer packaged goods, healthcare, government, technology, energy, manufacturing, mobility, and food and agriculture.

According to Andy Ng, Vice President and Managing Director at Veritas Technologies, sustainable supply chain management is crucial for reducing the environmental impact of e- waste and carbon footprint in today’s digital economy. Ng provides actionable tips for businesses to promote supply chain sustainability, which include incorporating sustainability into business strategy, assessing the supply chain for areas of improvement, implementing sustainability metrics and reporting, incorporating sustainability into product design and packaging, and incentivizing stakeholders to practice sustainability.

The future of supply chain sustainability involves dynamic and agile supply chains that can predict and respond to evolving demands. This requires rigorous sustainability key performance indicators (KPIs), optimized operating practices, an environmental, social, and governance focus in procurement decisions, and the adoption of sustainable technologies. Additionally, artificial intelligence (AI) can play a significant role in optimizing supply chain operations and reducing emission intensity by forecasting demand/supply patterns and identifying potential disruptions.

Source achieve-supply-chain-sustainability/