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Supply chain Sustainability Pressure Continues

Supply Chain Sustainability Pressure Continues

Oct. 18, 2023
Only about one-third of firms have net-zero goals in place, and of those that do, many are unprepared to meet them, says MIT report.

A recent report from the MIT Center for Transportation & Logistics, and the Council of Supply Chain Management Professionals (CSCMP), The State of Supply Chain Sustainability 2023, looks at how sustainability practices have evolved over a four-year period. The report concludes that there is pressure on companies to  make their supply chains more sustainable.

Following several years of turbulence around the world, including the Covid-19 pandemic and Russia’s invasion of Ukraine, supply chain sustainability efforts have proved resilient to certain types of crises but vulnerable to others. And for the fourth straight year, investors continued to have an outsized and growing role in putting pressure on firms to make their supply chains more sustainable.

This year’s report takes a closer look at firms’ net-zero goals. Only about one-third of respondents’ firms had net-zero goals in place, and of those that did, many appeared unprepared to meet them. Furthermore, net-zero carbon emissions goals appear to be clustered in wealthier countries, giving rise to concern about whether the global ambitions of net-zero goals can be achieved with only localized adoption.

“Companies say, ‘Hey, as a supplier of ours, here’s what our expectations are of you.… You need to hit X, Y, and Z when it comes to ESG.’ That is happing more and more often.," says Rachel Schwalbach, vice president for ES&G, C. H. Robinson, in a statement.  But another piece is on the value creation side, where the shippers will say, ‘Not only do we require this of you as a bare minimum of what you’re doing with your own work, but how can you help us? What are some of the basic things we can do together to reduce emissions?’” 

Over four years, pressure on supply chain professionals to improve their firms’ supply chain sustainability has grown every year across every measure the study tracks. And every year, the path toward achieving those goals appears to cross supply chains. This year shows that collaboration across supply chains appears to be especially important as firms struggle to measure and to reduce their Scope 3 emissions.

“Scope 3 continues to be elusive at scale because of still evolving definitional boundaries that vary by region and vertical, as well as the sheer complexity of managing and monitoring the supply chain where much of Scope 3 lies, "notes Katie Martin, princial lead for sustainability and ESG for Avetta, in a statement.. . 

Using technology to reach the variety of sustainability goals is essential. span style="font-size: 14.5px;">“Supply chains inherently require a significant amount of collaboration between partners, but just communicating regularly about your sustainability goals is not enough. You can’t manage what you can’t measure," explalins Brian Cristol, CEO Isometric Technologies, in a statement." In order to start moving the needle, supply chain partners need to leverage shared technology that can serve as a single source of truth for them to collectively measure the results of their sustainability efforts.” —Brian Cristol, CEO & Co-Founder, Isometric Technologies

 “Worldwide, the findings and supporting commentary found in this report continue to demonstrate the criticality of the supply chain ‘doing the right things right’ for society.” said Mark Baxa, CEO of CSCMP, in a statement."

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