The general public’s interest in sustainability has been rising for a while. In the absence of government laws, 63% of Americans, according to research by Cone Communications, want companies to promote social and environmental change. Studies also show that customers of all ages are prepared to pay extra for sustainable products.
But developing a sustainable supply chain is a complicated problem that calls for taking into account a variety of aspects.
You may learn more about sustainability-related concerns in this guide, as well as how to make sure your supply chain is ethically and socially responsible.
Sustainability’s significance in the supply chain
Businesses have to reevaluate their present practices in response to pressure from stakeholders, consumers, and even the employees themselves. According to Shopify’s eCommerce Market Credibility Study, more than 50% of businesses will prioritize increasing their sustainability in 2022.
Greenwashing and excellent PR are no longer sufficient; in order to succeed in the long run, businesses must adopt sustainable practices and adjust to changing consumer demands.
So where precisely should we start? Let’s start by taking a deeper look at the social and environmental elements, which are the two key areas of attention when it comes to a sustainable supply chain.
Human rights protections at work
The primary talking points when it comes to reducing adverse social effect in the supply chain are making sure that safe working conditions are provided and adhering to health and safety regulations.
We’re not only talking about customers or trade organizations seeking change; we’re also talking about politicians. Low-cost production is being replaced with a more ethical approach.
Governments have pushed for reform in this area, as seen by the Supply Chain Act in Germany, the Duty of Vigilance Act in France, and the Modern Slavery Act in the UK.
To ensure that suppliers uphold the human rights of their employees and adhere to the codes of conduct, businesses should make every effort.
reducing the detrimental effects on the environment
It’s been well documented how supply networks contribute to environmental contamination and how they affect climate change, and the results are not good.
According to research from McKinsey, a typical consumer company’s supply chain creates costs for society and the environment on a far bigger scale than its own operations, with a greater than 90% negative impact on the environment.
This basically indicates that a firm needs to start with its supply chain if it wants to become environmentally friendly. Stopping deforestation, lowering CO2 emissions, and cutting back on plastic pollution are the key areas of concern in this case.
After all, when customers say they are prepared to pay extra for goods from eco-friendly firms, that is what they are actually demanding.
What is required to guarantee supply chain sustainability?
The COVID-19 epidemic has permanently altered the supply chain. Unfortunately, problems with product shortages, manufacturing lags, and steadily rising pricing are becoming frequent occurrences for supply chains all around the world.
Businesses suffer with a time-consuming supplier procurement procedure, a lack of manufacturing and logistical data, ineffective screening procedures, and fragmented communication between the parties.
Dealing with these issues is difficult. It necessitates a comprehensive approach to the entire process and, frequently, a radical change in how a particular organization manages its supply chain.
Let’s examine the answers in more detail.
- Describe the supply chain’s procedures.
We must identify the source of issues so we can catch them early.
Supply chain mapping is used for this purpose. You may identify sustainability concerns like emissions and comparable dangers by gathering and recording data about every entity participating in your supply chain network. Then, you can concentrate on eradicating those issues at the source. Obtain information on not just your suppliers, but also those of your suppliers’ suppliers, and categorize them according to the amount of risk.
- Create effective sourcing plans
For a supply chain to be extremely effective, transparency is essential. Companies require appropriate procurement procedures for confirming the suppliers they engage with in order to make sure their sustainability standards are satisfied.
A excellent strategy to make sure that your requirements are satisfied is to have a code of conduct that your suppliers must follow, to check that they adhere to the rules in place, and to routinely audit their sustainability efforts and practices.
- Run your business with a single source of truth.
If the information you have does not accurately represent reality, you cannot make intelligent judgments. Making meaning of data may be quite challenging if it has been improperly gathered or has been dispersed among several sources.
In all phases of manufacturing or logistics, all stakeholders must be in agreement. By doing this, you may reduce room for misunderstanding, raise awareness, and make it simpler to monitor if sustainability is taken into consideration along the process.
- Enhance teamwork at all levels.
Sustainability cannot be ensured just via internal processes and communication. Your employees, stakeholders, and especially your suppliers must all share this objective.
Your whole supply chain network has to put in the effort to become more socially and ecologically conscious in order to meet a company’s sustainability goals for the future and ensure compliance is taken into consideration.
- Select eco-friendly packaging
According to studies on American customers, 70% of consumers said they would be willing to pay extra for ecological packaging. Customers place a greater emphasis on it because it is the aspect that they can see the most.
When trying to increase the sustainability of your packaging, start by analyzing the materials and volume utilized for each of your items. This covers not just the packing that is used to convey goods to your consumers but also the packaging used to receive and store goods. Select recyclable or biodegradable materials, such as paper, glass, bamboo, or metal.