What do you do if your supply chain needs a sustainable boost?

As you gather data, use a tool such as Open Supply Hub, to examine not only what is happening in your supply chain, but who else might affected and willing to work with you on a solution. For example, your manufacturer may be working with other brands in your sector who would also have an interest in upgrading the facility.

To boost sustainability in your supply chain, start with a thorough audit to identify inefficiencies and areas for improvement. Shift towards sourcing materials from sustainable and ethical sources. Implement energy-efficient processes and reduce waste through circular economy practices, like recycling and reusing materials. Collaborate with suppliers committed to environmental responsibility, and use technology to track and optimize logistics for reduced carbon footprint. Engage in partnerships for sustainable innovation and commit to transparency in reporting your supply chain's sustainability performance to stakeholders.

Supply chain sustainability can mean a lot of different things. Most often these challenges are identified by a reporting framework as scope 3 emissions or as human and labor rights concerns. Regardless, you should start with a materiality assessment to identify what is most important for your specific company and where you should target first. Once you know what your focus should be, you can set specific targets to get you there and identify the KPIs that will act as your compass on this journey.

Supply chain sustainability is inherently rooted in collaboration and partnerships. As we dive deeper into our value chain, it is common to find yourself asking much smaller companies for much more information than they have. This is where stakeholder engagement turns into stakeholder development. By creating industry groups to collaborate with other industry leaders who likely share some of the same suppliers, you can pool your resources and efforts to help your suppliers build their sustainability capabilities. This is the multiplication effect of supply chain sustainability and it all starts with talking to people.

Engagement of key stakeholders in the supply chain is truly crucial during a company’s sustainability journey. For example, as regards GHG emission of a company, it is said that Scope 3 emission derived from supply chain often accounts for 70% of a company’s total emission. In engaging key stakeholders in the supply chain, we may consider use of incentives like top-up premium, reward scheme, etc. for those reaching certain levels of performance assessed via some objective KPIs which were set by the company in line with its supply chain materiality.

Stakeholders along the supply chain are crucial for getting things done. In our sustainability consulting projects we see that especially in regulations like LkSG (and in future CSDDD) a collaborative approach between companies and ther 1st 2nd and 3er tier suppliers are important in order to get the transparency and reach the targets and goals with regard to sustainability. Here is important to consider the support of tools which facilities better the engagement and the cooperation.

Die Voraussetzung für nachhaltige Lieferketten ist Transparenz. Transparenz kann datengetrieben generiert werden. Z.b durch IoT, Traceability oder KI unterstützte Risikobewertungen von Lieferketten. So können Risiken entlang der lieferketten bezüglich Menschenrechtsverletzungen oder Umweltverletzungen eingegrenzt bzw. minimiert werden. Verschiedene europäische ESG Gesetze sind ein Treiber für eine nachhaltige Lieferkette und Einkauf. Z.b folgende Verordnungen: CSDDD, EUDR, LkSG, CBAM, CSRD.

Leveraging tools such as data analytics, artificial intelligence, and blockchain enables real-time monitoring of environmental impacts, optimization of resource usage, and traceability of products throughout the supply chain. Automation streamlines processes, reduces waste, and improves efficiency, contributing to overall sustainability goals. By integrating technology strategically, supply chains can achieve greater transparency, resilience, and environmental stewardship, driving positive impact while maintaining operational effectiveness.

Start by assessing areas for improvement, engaging stakeholders, and embracing technologies like data analytics and automation. Encourage a culture of experimentation and collaborate with industry peers to stay informed about emerging trends. Through prioritizing innovation, your supply chain can evolve into a more sustainable and resilient ecosystem, ensuring both environmental responsibility and competitive advantage.

Sustainable supply chain is so important, but overlooked. We are at the era where we have more resources to develop efficient technologies and methodologies to manage supply chains that serve the 3 P’s (planet, people, profit), yet still fall short. We need to teach our organizations to scan and eliminate all type of waste. Use AI to monitor the process and immediately mark red flags. Push the boundaries of big data analytics to develop realtime macroeconomic view of the entire supply chain. Implement dashboards that have all 3 P’s represented. And steer the operations from time to time toward a perpetually sustainable business model that not only create wealth but is relevant to protecting the environment and uplifting living conditions.

Supply chain sustainability is inherently messy because it involves going outside of your company's locus of control. Thus, making improvements here can look very different than organizing sustainability projects within the company you work for. Creating buy-in with clear opportunities and definitive value propositions becomes even more important. Embrace the mess! Because over 70% of emissions are in scope 3 and in the value chain, this is where the real potential lies. If done right, supply chain sustainability has the opportunity to remedy the "best of the rest" mentality of corporate sustainability and create positive feedback loops for large companies to lift up their entire supply chain with them.