What is supply chain sustainability?
Supply chain sustainability refers to the environmental and social impact a company may have, taking into consideration their entire supply chain – from raw materials sourcing, to production, transport and storage. Supply chain sustainability management entails promoting human rights, fair labor practices, environmental progress and anti-corruption policies throughout a company's network of suppliers, manufacturers, distributors, and customers.
In order to achieve supply chain sustainability, companies need to understand that they’re part of a larger system. Supply chain sustainability entails companies to not only understand the larger system they are in, but also work on the relationships they have with their suppliers.
“In most supply chains, 90% of the relationships are still transactional,” author and management expert Peter Senge told Harvard Business Review. “There’s very little trust and very little ability to innovate together. That must change.” What can companies do to align the people, activities, information and resources they leverage to take their products and services to market when it comes to sustainability? After all, isn’t supply chain management a 'big company' game? Not at all, there are steps that business of all sizes can take to make a significant impact on their supply chains.
Let’s look at some examples of how companies of all sizes can impact their supply chain sustainability:
1. Choose your suppliers carefully
Manufacturers can reinforce the sustainable supply chain by only picking the best suppliers – whenever they are available. There may not be any truly sustainable options for certain materials at a given moment in time. The starting point is intelligent information you can trust that enables you to make highly informed supply chain decisions.
2. Get creative with your supply chain sustainability
Cement company Lafarge continually examines its operations and supply chain to find ways to improve sustainability. This could be investigating how it can reduce dependence on new quarries and restore affected land at the end of a quarry’s life. It does this in collaboration with external bodies such as the Environment Agency and local wildlife trusts.
3. Explain the business value of supply chain sustainability
Sustainable supply chains must be viable from a business perspective and that typically requires buy-in from the management or executive teams. The language of sustainability must be made relevant to the boardroom by placing it in context. "If businesses are talking about sustainability being in some way separate from the 'day job’,” Simon Pringle, Head of Sustainability and Cleantech at BDO, told the Guardian newspaper, “we won't make the same level of progress as if those roles dissolve into the fabric of the business and it becomes part of people's day jobs."
4. Strive for supply chain transparency
The challenge of transparency – particularly in emerging markets – is deepened by the sheer number of suppliers deeper in the supply chain as well as the use of subcontractors and a myriad of standards and regulations. Digital technology and widespread mobility have given rise to an era where information transparency processes are increasingly capable of supporting entirely new models of sustainability. With Worldfavor's supply chain visibility solution, you can easily gain visibility on every tier of your supply chain with crowd-sourced data – trace impact, assess risks, and mitigate them effectively.
5. Trust the experts within supply chain sustainability
Turn to tried-and-tested methodology to assess the performance of your operations and supply chain when it comes to sustainability. In addition to the UN Sustainable Development Goals, frameworks such as the Global Reporting Initiative G4, UN Global Compact and ISO 26000, ISO 14001 or ISO 37001 (to name but a few) are quantifiable and practical tools for evaluating, monitoring and controlling your supply chain sustainability performance.
Another useful step to take is choosing a platform to provide accessible information about how your supply chains operate, and the environmental and social risks and opportunities they pose. Data collection, assessment and analysis of sustainability and compliance criteria within supply chains is now possible using tools like our Sustainable Sourcing solution. That are designed to enable companies to evaluate performance of their supply chain against some of the most established frameworks.
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