Sustainability and Your Supply Chain

Sustainability is a word that seems to be everywhere these days.

Nearly every well-known brand is using it to further their sales and advertising efforts. It’s pasted all over social media, and is a regular feature in the news. It has become so commonly used that it has almost lost its meaning.

But it’s so much more than just a marketing buzzword. When put in practice, it is the key to future-proofing your business.

An ever-growing proportion of consumers are considering the environmental impact of goods and services before they purchase. They want to know how their products are produced, and where they’re coming from — right from the source.

High profile sustainability “incidents” have highlighted the significant negative impact poor sustainability practices can have on consumer and shareholder confidence, and therefore corporate value. All trends are indicating that, unless your business ups its sustainability efforts, you can expect to see a considerable decline in profits in the not too distant future.

Smart companies have recognised this, and are making an effort to become more sustainable. Smarter companies are already putting heat on their supply chain to do the same.

Between toxic waste, water pollution, deforestation, greenhouse gas emissions and energy use, the environmental impact of your supply chain greatly outstrips the impact of your own operations. The non-profit global environmental disclosure platform, CDP, recently reported that supply chain emissions are 5.5 times greater than a company’s direct operations.

It’s clear that many corporations are merely outsourcing their environmental impact to other companies in their supply chains. Their direct operations might appear squeaky clean — but only because their supply chain is doing the dirty work.

As major purchasers, corporations have unparalleled influence in the transition to a sustainable economy. By selecting suppliers based on their environmental performance, they have the power to make an enormously positive impact on the environment. As summarised by Hugh Jones of The Carbon Trust, corporations must “make sustainability a decisive factor in evaluating suppliers, elevating it to sit alongside cost, quality, and security of supply”.

Key global purchasers and members of the CDP Supply Chain such as Walmart, Microsoft, Lego and L’Oreal, are already setting the example and deselecting suppliers that fail to act sustainably.

As environmental issues become an increasingly pressing topic, suppliers failing to act sustainably will progressively see it impact their bottom line.

Similarly, corporations that fail to recognise the importance of a “green” supply chain will engender their own fall from grace.

Is your business future-ready?