Greening the Supply Chain

It is estimated that 79% of companies with high-performing supply chains achieve above average revenue growth within their industries. Given the importance of businesses’ supply chains, unsurprisingly the majority of supply chain trends for 2020 revolve around the improved efficiencies and innovation within the supply chain itself such as IoT, futuristic robotic automation and AI.

Sparked by revolutionary and inspiring 16 year old Greta Thunberg’s ‘School Strike for Climate’, 2019 has been a huge year for climate change advocacy, motivating consumers and businesses across the globe to behave more environmentally responsible, leading to the development of supply chains going green being identified as a trend to watch going into 2020.

Greening the Supply Chain is consciously and actively integrating environmental responsibility and sustainability into supply chain strategy and management. Across multiple industries, supply chains, manufacturing and logistics processes exhibit numerous inefficiencies such as use of expensive and finite carbon emitting fuels, high levels of unrecycled waste and high consumption of electricity, all of which are costly not only for profits but also for the environment by detrimentally contributing to the global carbon footprint and global warming. By making the supply chain more sustainable there are a lot economic, environmental and social benefits to be reaped.

A core and obvious benefit to establishing a green and sustainable supply chain is the reduced environmental impact of business operations. Transport and distribution particularly are regarded as prime culprits for being the most environmentally damaging within the supply chain. UPS, one of the world’s largest delivery companies, however, prides its dedication in reducing its carbon emissions through investing in low-emission vehicles and route planning technology, ensuring that optimal routes are taken and unnecessary mileage and use of fuel reduced, positively impacting profits and simultaneously, resulting in fewer damaging emissions being released into the environment.

A World Economic Forum survey showed that 85% of consumers said that they were concerned about climate change. As a society, consumers are consciously making daily decisions in attempt to reduce their carbon footprint and act more environmentally friendly. Consumers are also taking more notice on how businesses are behaving too with an estimated 60% of customers not minding paying a higher price for sustainable and environmentally friendly products. By holding the ISO 14001 accreditation, businesses are demonstrating a commitment to operating more green efficient which not only has a positive impact on financial performance and the environment, it also provides a competitive advantage in the market place, benefiting the company by attracting more customers and business partnerships.

No business has a fully eco-friendly and sustainable supply chain but with 42% of companies surveyed by PwC ranking sustainability a high priority within their operations, it is evident that many organisations are striving for one. With clearly established initiatives and an analytical understanding of operations, companies can make efforts to adopt eco-friendly supply chain processes, allowing the business to operate more efficiently as well as being more in control of its impact on the local and global environment, whilst also attracting some altruistic public praise and customer loyalty too.