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The impact that sustainable supply chains have on business and reputation

September 26, 2019

Austin Srejma, Enterey

A new world is emerging.

Not only is climate change creating new weather patterns the world over and potentially changing the world’s climate forever, it is also fundamentally shifting the mindset of a generation.

Individuals such as Greta Thunberg, the 16-year-old from Sweden who has become the face of a revolution marching towards a greener future, have motivated thousands of people across the globe to strike in protest against climate change. This movement has even forced national governments to declare climate change emergencies.

And this changing mindset is having an impact on the business world too.

Socially responsible investments have grown by more than a third since 2016 to be worth $30.7trn by the end of 2018, and businesses are beginning to feel the pressure to improve their own sustainability.

Why Should You Care About Sustainable Supply Chains?

Traditionally, managing supply chain risks has been about ensuring the travel of goods from one location to another, and preventing events that can disrupt this process or significantly drive up costs.

In the modern world, however, the concept of supply chain sustainability has gathered momentum. This has given birth to a more holistic approach, covering the environmental, social and legal impact of a supply chain’s operations, as well as the more traditional logistics and technology associated with the risks.

The benefits of incorporating supply chain sustainability into the day-to-day running of a business can be huge, not only for the world we live in, but also the 9% to 16% reduction in the cost base of an organization (according to the World Economic Forum).

The reputational benefits that come from a dedication to sustainability and ethical supply chain management can also boost brand awareness and loyalty, with the World Economic Forum showing that supply chain sustainability can boost brand value by between 15% and 30%.

Organizations such as The Sustainability Consortium, World Wildlife Fund and The Sustainability Accounting Standards Board have all created guidelines to help businesses focus on their specific environmental goals, as well as key performance indicators to help organizations monitor their ongoing performance.

The benefits of incorporating supply chain sustainability into the day-to-day running of a business can be huge, not only for the world we live in, but also the 9 to 16% reduction in the cost base of an organization

How is Supply Chain Sustainability Achieved?

The rise in the interconnectivity of smart devices and the ongoing evolution of the Internet of Things means that now, more than ever, organizations across the globe have access to a wealth of data on how their supply chains are performing.

This means it is now possible for these supply chains to deliver goods and services in the most efficient way, both for the business and the environment.

Electric vehicles, for instance, not only offer carbon neutral delivery options for parts and goods, but continuous data streams from the vehicles can help supply chain managers analyze and improve delivery routes.

Real-time inventory lists can even help organizations partner with like-minded businesses to minimize excess capacity in delivery fleets and drive-down costs, and the corresponding impact on the environment, even further.

Which Industry is Driving Sustainable Initiatives?

Today, some of the leading lights in supply chain sustainability are found in the life sciences industry.

GlaxoSmithKline was recently named the fifth most sustainable corporation in the world by Corporate Knights, and biotechnology company Biogen Idec topped the list back in 2015.

For Biogen Idec, its focus on sustainability was originally one of simple economics. 

Investors had been asking the firm about its sustainability initiatives, spurred on by the rise of socially responsible investments. These questions from investors caused Biogen Idec to focus on the issue, and the benefits followed as they took action.

Between 2006 and 2013, the business reduced its water intensity by 66%, energy intensity by 57%, greenhouse gas emissions intensity by 64%, and by 2012 had stopped sending waste to landfill sites altogether.

Once Biogen Idec had sorted out its own internal processes, it then moved to its leading suppliers, and asked the top five to evaluate their greenhouse gas emissions as it sought to improve sustainability further up the supply chain and raise awareness of the issues facing the life sciences industry.

Not only did these initiatives present obvious business and environmental benefits, they also boosted its reputation with its employees as they got behind the sustainability drive – some 97% of employees said they were “proud to be associated with Biogen Idec”.

And with the green movement gathering momentum every day, businesses are only being put under increasing pressure from investors and consumers to consider their own sustainability, as well as that of their supply chain partners.

Those that act won’t only be saving the planet, they will also be putting their businesses on the path of long-term sustainable success.

Good leaders know that they can’t do it all alone. Enterey Consulting has the expertise to help you:

  • Manage a portfolio of proposed sustainability projects,
  • Prioritize sustainability within a portfolio, and/or 
  • Lead individual sustainability projects

We have a wealth of experience in leading transformational change, and can work with you to get the most out of your partners. Let's have a conversation together and discuss how to  get your company on the path to long-term success. Email us at hello@enterey.com.