Sponsored content - How to see, understand and change your impact: sustainability and supply chain

posted by Sponsored by GEP
31 March 2022

This content piece is in partnership with GEP

Promoting good practice is essential to meet net-zero targets.

Setting sustainability targets for your own organisation is one thing, but achieving those goals isn’t easy when you rely on third parties to keep you in business. Visibility over activities in the entire supply chain will be crucial to maintain control, fulfil your environmental ambitions and avoid inaccurate reporting.

Encouraging good practice throughout your supply network and making sure changes are actually being made is a huge task. Supply Management Insider spoke to industry experts to see how it can be achieved.

1. Goal setting 

Having clear goals and setting expectations among staff and suppliers is crucial. As a result of COP26, large companies are signing up to net-zero contracts, and initiatives such as the Clydebank declaration. 

Creating company-wide strategies to match those goals is essential – and likewise the need to ensure suppliers are equally prepared. Soren Skou, CEO of Maersk, points out: “Two-thirds of our top 200 customers have now set net-zero or science-based decarbonisation targets and they rely on us to achieve their ambitious targets.” 

2. Taking responsibility

An organisation’s sustainability strategy has to come from the very top. It is important to show that management is fully behind the targets, and are driving it throughout the business. Suppliers will be influenced by this powerful message, as it stresses the importance of ensuring the targets are met. 

Every person involved in the running of your business should be accountable “A key challenge is how to make the goals relevant to an individual in their decision-making,” says Emile Naus, partner at independent management consultancy BearingPoint. 

“If the company sets a global target but doesn’t break it into manageable chunks and then targets an individual purely on cost savings, it is unlikely that individual will consider the sustainability impact of their decisions.” 

3. Working together  

No sustainability strategy can be achieved in isolation from other organisations. Companies have to be prepared to work with others, and take the initiative where necessary. 

At Maersk, this is a policy they have been following since 2018, as Søren Skou explains. “In 2018, Maersk took leadership with a strong commitment to decarbonise our shipping operations by 2050 and develop solutions to help the industry reduce its carbon footprint. We have proven that scalable technologies and solutions are available and governments and industry must work together to address this long term.”

Ian Murphy, managing director of Foodbuy (Compass Group UK & Ireland’s procurement division), agrees that achieving environmental targets requires a joint effort. “Working in collaboration with our suppliers and our clients is critical to our success. Additionally, we need to educate our employees and customers, as well as embed sustainable practices in all that we do.”

The company has announced the ambitious commitment to reach net zero by 2030 but has an equally ambitious plan to achieve it. “We have published a roadmap, which highlights key milestones in our journey to reach this goal. However we also recognise there are many unknowns and are open to new ways of working,” says Murphy. 

4. Measuring targets

Once clear strategies are in place, it is important to ensure that those are constantly measured to see if targets are being met. As Emile Naus adds: “What gets measured, gets done. The goals need to be something that can be tracked. The measures need to be public, and included in your team’s goals, so that all decisions will consider the sustainability effect. 

“By extending the goals and measures across the wider supply chain, supported by an independent tool, you can ensure that decisions made throughout the supply chain are reflected. Having the data available at near real-time will be of further benefit, as the impact of decisions becomes more visible.”

5. Constantly check every strategic claim 

Greenwashing is a major problem, with companies providing misleading information about their environmental credentials. Making unsubstantiated claims to be sustainable will lead to bad publicity, so being transparent is critical. 

This means that not only your company strategy and claims but also those of your suppliers have to be totally accurate. Getting it right the first time is the best policy, but companies need to constantly check and double-check to make sure that their own standards and those of suppliers haven’t slipped.

Unilever is one company that is being transparent about transport. It has accelerated its transition to cleaner solutions, not just in its own operations, but along global value chains as it works to achieve net-zero emissions by 2039. “With logistics and distribution accounting for around 15% of our greenhouse gas emissions footprint, it’s important that we work with partners shifting to lower-carbon fuels,” says Michelle Cruse, head of logistics and fulfilment at Unilever. “We are proud to partner with Maersk as they pioneer carbon-neutral transportation.” 

6. Keeping track and managing data

Strategies of this complexity mean there is an enormous amount of data. Using innovative technology to manage the data from your company and your suppliers, along with environmental policy compliance details, makes meeting sustainability targets far more achievable. This allows organisations to lead from the front, engage the whole supply chain, and make authentic claims about reducing their carbon footprint.

GEP creates systems linking environmental and sustainability requirements to your Supply Chain of Conduct. This is achieved by using emerging technologies like AI to reinvent procurement, logistics and supply chain operations, alongside platforms like Automatic identification and Data Capture (AIDC) to help make systems more efficient.

ABOUT GEP

GEP delivers transformative supply chain solutions that help global enterprises become more agile and resilient, operate more efficiently and effectively, gain competitive advantage, boost profitability and increase shareholder value.

Headquartered in Clark, New Jersey, GEP has offices and operations centres across Europe, Asia, Africa and the Americas. www.gep.com.

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