'A resilient supply chain is a sustainable supply chain'

The link between sustainability and business performance means “a resilient supply chain is a sustainable supply chain”, according to the procurement boss at Rolls-Royce.

The CIPS Sustainable Procurement Summit heard that in collaborating and innovating with suppliers, procurement teams could build sustainability and resilience into their supply chains at the same time. 

In a session hosted by EcoVadis’s regional director, Lazar Armianov, on meeting ESG goals through responsible sourcing, David Deakin, CPO at Rolls-Royce, said: “There’s a need for communication around what we mean by sustainability, and what it means for the actual, tangible, immediately-deliverable differences. The link between sustainability and business performance – it isn’t just an option, it makes sense. The most resilient supply chains are the most sustainable. 

“A resilient supply chain is a sustainable supply chain. Achieving our sustainability goals is complementary with achieving efficiency, circular economy, attracting great talent – it’s not a mutually-exclusive thing, it’s heavily embedded.”

Deakin also emphasised the importance of leadership. “It starts with the leaders and procurement professionals, with a personal responsibility to make change happen. You can either care about it or not - you have to make the choice to prioritise. Where is sustainability placed within the goals of the group? What is your platform?

“The company I work for has placed the transition to net zero as the core mission of the group. Therefore, we have alignment within the business on driving the sustainable agenda.

“Value and cost-driven conversation has helped – recycling materials has been important for years, simply because those waste products are valuable. There’s no definite answer yet, other than driving conversation and collaboration.”

As an aviation company Rolls-Royce has a strong contribution to carbon levels, Deakin told delegates. Aviation contributed 7% of global greenhouse gas emissions – but this was an opportunity, rather than an issue.

“We do have a significant fingerprint on the sustainability question,” Deakin said. “This is a position of strength, a position of power, a position of opportunity, and the time is now to do something about it. We’re investing in the capabilities to fundamentally shift aviation and change the nature of that fingerprint.”

Deakin said the company's direct impact on carbon emissions through its products meant internal stakeholders were enthused to make changes.

Innovation and collaboration were key to this process. The aviation industry is particularly capable in this area, Deakin noted, as Rolls-Royce makes many of the same things as its suppliers.

“So we’re able to share and exchange ideas and collaborate in a different way around minimising the sustainability impact and transitioning our product to the net zero goals,” he said.

“At the heart of it, what we do is connect people and societies, and that is something we hold dear. We harness our people to focus on that.”

Collaborating with governments, suppliers and other partners in the industry would allow procurement to bring innovation to the market safely and quickly, Deakin added. Doing so, however, would require regulations and broader systems to keep up with procurement, technology, and investment.

“It’s important to keep pace with the changing world and environment,” he said. “Is procurement a source of energy? Yes. Is procurement a source of appetite? Is procurement a source of momentum? Yes. Procurement teams see things not seen by others, they create connections that don’t exist elsewhere in the enterprise. Procurement can lower barriers to innovation and change.”

Consumers could contribute by being more thoughtful about their choices, Deakin said. Government and industry must make choices together, given the value a sector like aviation can bring. Consumers must keep putting pressure on the industry to drive the speed of decarbonisation through electric and hybrid flight and sustainable fuels.

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