Supply chains often contribute substantially to a company’s carbon footprint; supply chain sustainability represents an important opportunity to meaningfully reduce it. International law firm Crowell & Moring has released results from its most recent survey, “ESG Survey: Environmental Performance and the Stakes for Your Business.” After surveying 225 corporate decision-makers in sustainability it showed that nearly 6 in 10 companies are setting goals for improving supply chain environmental performance. However, the survey also points to key challenges companies face as they green their supply chains, from increased costs to the difficulty of holding suppliers to verifiable standards. While more than half of companies have set goals, about one-third are actually measuring supply chain sustainability.
Making Goals Happen
A key challenge emerging from the data is that carbon emissions result from indirect activities not controlled by a single company and are ubiquitous throughout the supply chain. Decentralization and interdependency— fundamental characteristics of the modern global supply chain—represent the chief hurdles to effective corporate “greening” efforts described in the survey.
At best, many companies find themselves at the goal-setting stage. Companies likely resist including supply chains as core pillars of sustainability programs because it requires participation and cooperation in an area that is often neither a priority for supply chain partners nor promoted by their host countries.
But successful sustainability programs require transparency among partners. For example, companies must obtain detailed information about suppliers’ own sourcing patterns and operations, along with transportation and logistics data associated with moving materials and finished goods across borders. Suppliers often view this type of due diligence as burdensome, resulting in higher costs.
Key considerations for companies moving toward greener supply chains as they engage supply chain partners on ESG diligence matters and embrace environmental sustainability elements within their broader partner qualification and auditing processes include:
- Assessing current supplier relationships
- Finding new ESG opportunities with new suppliers
- Looking downstream for a clear path to meaningful “Greening”
To learn more about how your organization can improve, read the full article on Industry Week.
Source: Industry Week
