Sustainability as a business imperative in supply chain management increases, according to new report

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The 2021 State of Supply Chain Sustainability Report, explores how supply chain sustainability (SCS) practices are being implemented globally and what that means for professionals, enterprises, industries, and the planet.

This year’s report indicates that pressure to support SCS came from multiple sources, both internal and external to companies, but increased the most among investors and industry associations. Internally, company executives were standout champions of SCS, indicating that the growth in SCS is a business trend and not a fad.

The report is founded on a large-scale international survey of supply chain professionals with over 2,400 respondents conducted in late 2020. Survey results are combined with 21 executive interviews and supported by news and social media content analysis from the same year. The MIT Center for Transportation & Logistics (MIT CTL) and the Council of Supply Chain Management Professionals (CSCMP), a leading, global, professional membership association, collaborated on data collection in order to attain the broadest audience of practitioners and input from various sectors.

This year’s report is sponsored by BlueYonder, C.H. Robinson, KPMG, Intel, and Sam’s Club. “We believe cooperation between sectors is vital to thoroughly understand the complexity and evolution of sustainability efforts more broadly.” Said David Correll, MIT CTL research scientist. “Our work with CSCMP and our sponsors helps us to embed this essential research and its findings within the context of the real-life practice of supply chain management.

The report findings are beginning to shed light on how supply chains are becoming increasingly recognized for their impact on a firms’ sustainability objectives and public image. “Our members tell us that now, more than ever before, that the very notion of embedding sustainable practices from within their company’s supply chain delivers real, tangible results.” says Mark Baxa, CSCMP President and CEO. “Competing in today’s global marketplace is not just about the high-quality products supply chains plan, procure, make and deliver. It’s about doing the right things right for the whole of society.”

Although there are many approaches to investing in SCS according to the report, interest in human rights protection, worker welfare and safety, and energy savings & renewable energy, increased significantly over the last year. Supplier development was found to be the most common mechanism used by firms to deliver on their SCS promises.

However, there are formidable obstacles to overcome too. For example, it is notable that most of the momentum behind SCS appeared to come from large (1,000-10,000 employee) and very large (10,000+ employee) companies covered by the research. Small- to medium-sized enterprises appeared far less committed. More work may be needed to bring them into the fold through a better understanding of the barriers they face, a possible topic for future reports.

A broader concern is that more attention from stakeholders – notably consumers, investors, and regulators – will bring more scrutiny of firms’ SCS track records, and less tolerance of token efforts to make supply chains sustainable. Improved supply chain transparency and disclosure are critical to firms’ responses, the report suggests.