Sustainability: No Longer an Option but a Necessity for Suppliers
Across the globe, supply chain risk management has become a key priority for corporations. Circular business models encourage companies to implement stricter sustainable procurement policies, focused on the purchase of sustainable materials, products or services.
Walmart: sustainability objectives include Walmart’s global supply chain
In December 2016, Walmart became a member, together with a number of other major retailers, of Ellen MacArthur Foundation’s Circular Economy 100, committing to a more circular business approach regarding supply chain management.
Walmart is planning an even firmer sustainable supply chain management system, that will monitor and engage suppliers. In order for environmental and social impacts to be minimized, greater emphasis will be placed, among others, on matters like greenhouse gas emissions (GHG), more efficient packaging, water conservation, and ethical sourcing. Walmart’s suppliers will thus have to develop new, circular business models focused on energy, resource and cost efficiency.
Top producers take action
Unilever’s sustainable supply chain program encompasses 200,000 different materials and more than 160,000 suppliers. Moreover, by reducing their overall environmental impact by one-third, Unilever grew from €40 billion to nearly €50 billion in revenues, showing that sustainability can be profitable, too.
Coca-Cola and Dell have also adopted a circular business model and supply chain management best practices that can make the most of reduced costs, minimize risks and improve brand reputation.
Sustainable procurement standards, regulations and policies
New regulations and international standards, combined with increased consumer and investor pressures, mean that producers will need to place greater emphasis on supply chain management, monitoring sustainability risks and opportunities: 84% of respondents in BSR/GlobeScan’s State of Sustainable Business Survey said they had a supplier code of conduct, and 61% said they considered sustainability in sourcing strategies.
Additionally, ISO 20400, the first international standard for Sustainable Procurement, is being finalized Tweet This! and prepared for release later this year, building on current standards and providing businesses and organizations with best practice guidelines for integrating sustainability into their procurement processes.
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