The impetus to make supply chains more sustainable continues to gain momentum

Much of the effort to make our business sustainable is concentrated in the heavily disrupted supply chain during the COVID-19 pandemic. Still, a new study by MIT’s Transport and Distribution Center (CTL) found that even as the pandemic intensified, investment in supply chain sustainability (SCS) slowed significantly.

The findings, included in the 2021 Supply Chain Sustainability Report, show companies sustainability Of their supply chain at their risk. This is especially true for companies with low or moderate SCS commitment, such as organizations classified as “Low Effort” and “Dreamer” in the new SCS Firm Typology, which appears for the first time in the report.

The study also highlights that companies are putting pressure on SCS to invest resources. This pressure came from a variety of stakeholders last year, suggesting that supply chain sustainability is a business trend, not a fad.

CTL is working with the Supply Chain Management Expert Council (CSCMP), a leading association of expert membership, to publish the 2021 Supply Chain Sustainability Report. This year’s report is sponsored by BlueYonder, CH Robinson, KPMG, Intel, and Sam’s Club.

COVID-19’s unabashed commitment to sustainability

“We believe that cooperation between sectors is essential to gain a broader understanding of the complexity and evolution of our commitment to sustainability,” said CTL research scientist David Correll. “The collaboration between CSCMP and our sponsors allows us to incorporate this important research and its findings into the context of actual practice. Supply chain management. “

The survey included a large international survey of supply chain professionals with more than 2,400 respondents. This is more than double the number received in the previous report. The survey was conducted in late 2020. In addition, 21 detailed executive interviews have been completed and relevant news items, social media content, and reports have been analyzed for the report.

More than 80% of survey respondents claimed that the pandemic had no impact or strengthened the company’s commitment to SCS. Eighty-three percent of the executives interviewed said that COVID-19 accelerated or at least raised awareness of SCS activity, bringing urgency to this growing area.

The pressure to support supply chain sustainability came from multiple sources, both internal and external, but was the greatest among investors and trade associations. Internally Company executives He was an outstanding champion of SCS.

While there are many approaches to investing in SCS, interest in human rights protection and worker welfare has increased significantly last year, along with energy conservation and renewable energy. Supplier development was the most common mechanism used by companies to fulfill their SCS commitments.

Increased investment, some speed bumps

Given the momentum behind SCS, it is possible that in the future there will be more investment in this increasingly important area of ​​supply chain management. And practitioners who bring deep-area expertise and comprehensive views to the table will become more influential as sustainability advocates.

However, there are also some formidable obstacles that must be overcome. For example, most of the momentum behind SCS appears to come from the large companies surveyed (more than 1,000 employees) and the very large companies (more than 10,000 employees). It is worth noting that. SMEs are much less committed and need more work to fold their enterprises with a better understanding of the barriers they are facing.

The broader concern is that with increasing attention from stakeholders, especially consumers, investors and regulators, companies’ SCS performance will be scrutinized and their tolerance for token efforts to make their supply chains sustainable will increase. Is to drop. The report suggests that improved supply chain transparency and disclosure are critical to a company’s response.

Fighting social injustice Climate change mitigationContinues to pressure companies to invest in meaningful SCS initiatives. Therefore, the relationship between a company’s SCS performance and profitability may be strengthened in the coming years.

Do companies follow through?

When companies tackle these issues, they will face some difficult decisions.For example, Chief Operating Officer of Consumer Goods the company Interview for a report explaining that it works through Pandemic Constraints as “moral calculations” that had to temporarily sacrifice some sustainability commitments to achieve others. Such calculations can challenge many companies to coordinate their response to SCS requirements. The key question is to see how much a company’s recent net-zero commitment will translate into effective SCS actions over the next few years.

The CTL and CSCMP research teams are laying the foundation for the 2022 Supply Chain Sustainability Report. This annual status report aims to help practitioners and the industry make more effective and informed sustainability decisions. Next year’s report survey will begin in September.

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