Industries involved in the production, distribution and packaging of goods have a central role in driving supply chain ESG practices.
With greater spending power and the emergence of new technologies, the amount of e-waste is set to grow. Supply chain sustainability is therefore imperative for businesses to reduce waste and optimize resources, with the added benefit of reducing costs.
Supply chain sustainability refers to integrating environmental, social, and governance (ESG) standards into every stage of the supply chain. This means that businesses should look to achieve sustainability not just within their operations but also among their suppliers and clients.
Some actionable tips for businesses include:
- Incorporate a sustainability plan into your business strategy
This entails setting goals, setting benchmarks and aligning sustainability activities with the company’s vision and values. A sustainability plan should address the full value chain from raw material extraction through to end-of-life product disposal. This can help firms to identify areas where they can make the most significant impact, in collaboration with suppliers and other stakeholders.
- Assess the supply chain for areas of improvement
First, establish a baseline by evaluating the ESG impacts of the entire supply chain as well as individual contributors. This assessment should concentrate on various aspects such as raw material procurement, logistics and transport, energy-efficient manufacturing, packaging and waste management; and adherence to rules and regulations. After identifying areas for development, create a plan and track progress. This includes setting sustainability objectives, deploying new technologies or processes, and fostering collaboration with suppliers to promote sustainability.
- Implement sustainability metrics and reporting
With new software solutions and analytics tools available, businesses can easily track key sustainability metrics across the supply chain. This enables comprehensive reporting to ensure sustainable practices are implemented properly, and that areas for improvement can be identified.
- Incorporate sustainability into product design and packaging
Design products for durability to reduce waste and replacements. This involves using recyclable materials and sustainable packaging, along with the implementation of closed-loop systems.
- Incentivize stakeholders to practice sustainability
Some firms have been implementing sustainable supply chain finance practices in a manner that minimizes negative impact and creates ESG benefits for all stakeholders involved in bringing products and services to the market.