How Sustainable Supply Chains Help Business and Our Planet Thrive

Businesses cannot succeed in societies that are failing. There have been many lessons learned from the pandemic, but two things stand out: the power of existential threats to impact our daily lives, and the strength of collaboration when organizations around the world mobilize to solve complex problems.

Sustainability isn’t a new idea, but the pandemic certainly elevated our focus on it. In a recent survey from the IBM Institute for Business Value (IBV), 93% of respondents said the pandemic impacted their views on environmental sustainability. This new focus has created a ripple effect, from companies to employees, to consumers.

At a high level, companies are starting to think globally while acting locally. Corporate thinking is moving away from competitive cost to competitive risk.

At the same time, employees and prospective talent are prioritizing sustainability in their careers. More than two-thirds of the full potential workforce are more likely to apply for and accept jobs with socially and environmentally responsible organizations—and nearly half would accept a lower salary to work for such organizations.

Consumers have also made it clear that they are willing to invest in a sustainable goods, using the power of their pockets for a sustainable future. The study found that 54% of consumers say they will gladly pay a premium for sustainable, environmentally responsible brands.

This shared sense of purpose between businesses, employees and consumers only increases the need for digital transformation—particularly in supply chains, where connecting operational excellence with sustainability can drive real, measurable progress.

Sustainability and supply chains

Supply chain organizations have become foundational, delivering new value using the United Nations Sustainable Development Goals (SDGs) as a roadmap for creating sustainable supply chains by 2030. Bridging the gap in insights across global supply chains is needed to enact meaningful change and address systemic challenges in the decade of our lives.

The alignment of purpose, collaboration and digital networks is a powerful differentiator—a company’s ability to realize business objectives is tied to others realizing theirs in the communities they serve. Trust, transparency, visibility and collaboration are key to building holistic, network-based responsibility across the value chain while transitioning from a linear way of working to a sustainable supply chain.

Designing supply chains for the environment

Creating sustainable supply chains for long-term environmental protection will require collaboration at scale, cross-industry involvement and cooperation across global supply chains, aiming for zero waste solutions and innovative management solutions for existing waste.

Waste from plastics, electronics, apparel and other industries puts increased pressure on reverse supply chains and recycling efforts. Designing products with the environment in mind is an opportunity to reduce waste in packaging, parts and other components.

Energy management and carbon neutrality

Reducing energy consumption is cost effective—and coupled with renewable electricity, it also helps reduce the atmospheric concentration of greenhouse gases.

Automation is an effective way to reduce energy consumption and support sustainability efforts in your organization. Increasing automation in facilities and asset management can improve both operational efficiency and energy consumption while also supporting net zero emissions and carbon neutrality initiatives. Powerful analytics, AI and sensor-controlled systems can be used to cut energy consumption, control energy use, predict maintenance needs, prevent energy waste by identifying inefficient energy use and achieve ambitious cost-saving targets.

Ethical and transparent ecosystems

An organization’s sustainability and ethics have become measurable performance indicators. To effectively use this data, cross-industry, multi-enterprise ecosystems and platforms require shared visibility. Agile operating models can help organizations realize near-instant insights for transparency across the entire organization.

Workforce virtualization and the future of work 

Virtualization makes it possible to bring the enterprise into the homes and work environments of customers, employees and business partners. When the pandemic hit, organizations around the world learned how critical that capability really is. Today, more organizations than ever have enabled remote work to some degree in their organizations. This new, hybrid way of working allows organizations to draw on global talent pools, creating opportunities for greater diversity and inclusion.

Hybrid work models are important for sustainability—reducing the need for physical assets and infrastructure means carbon and pollution are also reduced. As remote work with a dispersed workforce becomes more and more ubiquitous, extended automation, connectivity and transparency will be critical to foster human expression and engagement. In the era of extreme digitization, organizations need to nurture employees’ digital, cognitive, social, emotional, adaptability and resilience skill sets to be successful.

Remember: not all profit is equal. When investing in sustainable supply chains, keep in mind that profits involving a social purpose have a higher form of capitalism—one that will allow our society to advance. With a shared sense of purpose, community prosperity and corporate success can go hand in hand, and sustainable supply chains can bridge the gap between talking about sustainability and taking action for global change.

Read more about how I am helping customer transform their supply chains at IBM👉🏿

About The Author

Sheri R. Hinish
Sheri R. Hinish
SupplyChainQueen ® | Executive Advisor and Change Leader | EY Principal and Senior Leader | Passionate about Supply Chain, Sustainability, Innovation, and Inclusion|

To read more about Sheri R. Hinish, check out her full bio here.