Published 10 months ago.
About a 4 minute read.
Image: Daniel Torobekov
Despite many big brands working hard to meet decarbonization remits, one key facet remains out of touch on the journey to net zero — engaging the entirety of a supply base.
Whether it’s the impending pressure of government-mandated sustainability
targets or a collective sense of awakening, brands large and small are now
becoming acutely aware of their responsibilities when it comes to reducing
However, there remains a lingering perception that sustainability measures —
from responsible procurement and ethically designed products and services to any
number of others — are at odds with profitability, something which is typically
the main driver for institutional change at boardroom level.
Put simply, this does not have to be the case.
Our research at Supply Pilot has shown that increasing sustainability can be
responsible for approximately 20 percent of a business’ financial
something which can be achieved through a combination of looking closely at how
efficiently resources are being used and how small changes can be made in your
Both resource efficiency and the principle of marginal gains work best when they
are done at scale, throughout the whole supply chain; but with global brands
having hundreds if not thousands of suppliers, effective supplier collaboration
is no mean feat.
For boardroom leaders, this is where an element of bravery and sticking your
head above the parapet comes into play. Especially for larger brands that
haven’t yet made huge strides in sustainability, there is a risk of
“greenhushing” — rather than being acknowledged for moving in the right
direction, you risk being called out for not doing enough; so, you keep quiet.
Once you have started, the next step is to enact that which sets your business
apart — moving from intention to action. When we talk to brands, businesses and
retailers, we often use the analogy of quitting smoking — do you want to just
talk about quitting smoking or do you actually want to do it? Those who just
want to talk about it will find ways of measuring how many cigarettes they smoke
and how much they spend on them; but those who want to quit will understand the
overall impact and take action.
It’s the same with sustainability — you can have a million and one metrics to
measure your total carbon
but without working with your suppliers on how to reduce
it can be a worthless exercise. But brands of any kind of significant scale will
have hundreds and thousands of suppliers, and limited time and resource to
engage with them.
Many will apply the Pareto
principle to sustainability in
their supply chain, focusing most of their efforts on working with the top 20
percent of suppliers. While this can be effective in making the maximum impact
with limited resources, there really needs to be engagement at all levels —
working to scale to have a noticeable impact throughout the supply chain.
If this doesn’t happen, the smaller suppliers that typically need the most help
are left behind. To counter this, companies need to arm themselves with the
right tools that allow you to focus on the Pareto, but also enable the
conversation with others.
The true key to driving this positive change and moving from intention to action
is to engage your whole supply chain in the sustainability journey and bring
them along with you. Ask yourself the question: If the top suppliers are looking
at the road to net zero as a 30-year strategy, how long will it take the rest?
Companies must work with the entire supply chain if they are to be seen as
taking net zero and carbon reduction seriously. If not, they risk leaving behind
a significant section of suppliers that may well have great ideas for how to
address sustainability challenges, but not the method of making them heard.
Bringing everyone along on the journey also has the benefit of shared learnings,
where the smaller suppliers learn from the bigger ones and — often more
critically — vice versa. With everyone on the same journey, smaller suppliers
can incorporate some processes used by larger suppliers that they wouldn’t
typically be exposed to; while larger businesses can learn from innovations
often introduced by their smaller counterparts, which aren’t as constrained by
tradition and corporate structure.
By taking this collaborative approach to supply chain engagement, businesses can
be much better placed to hit the ambitious targets that we face. Critical to
this is working closely with all suppliers in a scalable way to identify what
they can achieve, and how they can work together towards a common goal.
In doing this, sustainability gains can be made immediately — bringing
significant, simultaneous benefits for both the environment and business growth.
Published Apr 14, 2023 8am EDT / 5am PDT / 1pm BST / 2pm CEST