WHAT ARE THE BUSINESS BENEFITS OF A SUSTAINABLE SUPPLY CHAIN?

The benefits of supply chain sustainability are often highlighted as reduced carbon footprint, reduced energy, and reduced resource consumption.  However, the benefits are much greater than those associated with the logistics and transportation segment of the supply chain.  Organizations should give consideration to sustainability in their supply chains for these additional reasons:

  • Corporate customers are requiring suppliers to adhere to sustainable practices in order to continue to conduct business together.  Recent research from the Carbon Trust, a non-profit organization, shows that 56% of multinational companies plan to drop suppliers based on low carbon performances. [1]
  • Improved bottom line financial results
  • “Consumers and Wall Street recognize the importance of green practices and sustainability – which more and more drives increased sales and share valuation.” [1] A recent Mercer study stated the best way for financial investors to manage portfolio risk associated with climate change may be to shift 40% of their portfolios into climate sensitive assets with an emphasis on those that can adapt to a low-carbon environment. [1]
  • Tax and investment incentives from the U.S. government and other countries are being provided to companies with sustainable practices.  This trend for mandating sustainable practices is growing in some regions of the world.
  • Companies that can identify and implement sustainable supply chain practices experience positive public relations due to being perceived as a good global citizen which can yield great benefits.