Competitive advantage through sustainability in the Supply Chain

Sustainable Supply Chain

In 2019, the topics of environment and climate protection were particularly in the focus of the public and the media. In 2020 this topic will expand even more and sustainable management is more important than ever. Companies are asked to be able to provide important interest groups such as customers, employees, investors and business partners with information about social and ecological standards in their own production facilities and with suppliers. The prerequisite for this is transparency within a sustainable supply chain.

Sustainable supply chains can lead to a competitive advantage

Since purchasing decisions are now often influenced by factors that come into play along the supply chain, it can become a significant competitive advantage for companies to make their supply chain more sustainable. But especially in the area of ​​sustainability in the supply chain, there are many challenges that companies have to face.

The main topics that play an essential role for a sustainable supply chain include: packaging, transportation, transport routes, supplier management and (warehouse) logistics. In addition, the requirements are growing to make all processes transparent and to guarantee complete information on the origin of all components and goods.

If you look at current developments, consumers in particular are exerting increased pressure on companies to make their value chain more sustainable. They want to know under which conditions the products they buy were manufactured and delivered and how they can contribute to a more sustainable use of resources. Consumers are increasingly demanding environmentally sustainable products and trust in companies is becoming a critical success factor for brand value. The requirements of investors and analysts are also increasing in company valuation and the corporate due diligence is moving into focus.

The statement from Dr. Jan Joachim Herrmann, Partner at PwC Germany, sums up this development as follows: “End customers are questioning the sustainability of products more than ever before. In the first stage, these requirements primarily affect the B2C industries. However, this requires consistently sustainable supply chain transparency down to the last stage of the value chain. Ultimately, all industries have to adjust to corresponding changes in demand.”

Implementation of sustainability aspects still has catching up potential

Hermes surveyed 200 companies in Germany on the subject of “Sustainability in Supply Chain Management” and came to the following conclusion: For 67%, sustainability aspects such as energy consumption, CO² emissions, environmental compatibility and social responsibility for their own employees and those of suppliers are very important. However, there is still room for improvement when it comes to implementing sustainability aspects within the supply chain. Half of the companies surveyed stated that there was no pressure to act from their customers and that they lacked the strategy and know-how for sustainability management.

So far, only 19% of the companies surveyed have recorded their company’s CO² footprint – a first step towards reducing it. However, these companies have already taken further measures to ensure climate neutrality and offset more than half of their CO² emissions. A large number of these companies realize additional cost and emissions savings by optimizing existing processes, acquire CO² certificates to support climate protection projects and try to increase their energy efficiency in industrial properties. As a further step, the logistics decision-makers of 32% of these companies also hold their external service providers and suppliers accountable and report their CO² emissions.

It is becoming apparent that green companies will actively lead the way and thus secure a competitive advantage with customers in the long term. In order not to fall behind, all companies should pay more attention to environmental aspects within their supply chain.

 

 

Sources: 

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