SUPPLY CHAIN SUSTAINABILITY
Get your supply chain in line to meet your ESG goals
Ensure sustainability within your supply chain
The first step to ensure sustainability is to establish a seamless flow of practices throughout your entire supply chain, from your 1st tier supplier down to your nth tier supplier.
Our Sustainability Supply Chain service will support your team in implementing a supply chain that is competitive, sustainable, flexible, and responsible by developing the right tools such as a sustainability policy, a supplier code of conduct, and contractual amendments. Once the tools are set in place, our team will deploy the code of conduct to all your suppliers and will monitor the commitment and compliance of your suppliers on-site. Our aim is to ensure your internal and external stakeholders are committed to your ESG goals and more particularly to your purchasing responsibility.
A sustainable supply chain policy aims to identify the environmental norms that will be reflected in your sourcing strategy. This policy will be applied at each step of the purchasing process to achieve a cost-effective and competitive supply chain while generating social and environmental benefits. The identification of these specific criteria will help your buyers properly select any new supplier and will ensure a sustainable procurement.
The purpose of a supplier code of conduct is to put in place guidelines and standards for suppliers to respect in terms of safety of work conditions, labor practice, environmental impact, and ethics.
The supplier code of conduct is integrated into the sustainable supply chain policy. This code will ensure that your suppliers are committed to respecting sustainable development principles, in line with your goals, across their operations. We provide you, on-demand, with audit services to ensure compliance.
A contractual agreement is the supplier’s ultimate commitment to the company. The addition of a contractual clause linked to sustainable development principles seals the commitment of suppliers. The clauses will be defined according to your values and expectations.
“I want to take a moment to thank you. First, we really appreciated the approach of Global Partner Solutions. Your expertise in ESG has provided valuable information that has allowed us to reflect on and achieve specific objectives with our team!
You always think of new and different ways of approaching a challenge; your unique perspective is a tremendous asset to us. We know how important it is for our organizations to switch to ESG mode, but we didn’t know how to get there. Your approach has been valuable in charting the course to achieve our goals.
I will not hesitate to recommend your firm to those who want to excel in the new world of sustainable development.”
-Patrick Paradis, CEO at Giolong International
What is Supply Chain Sustainability, and Why is it Important?
Supply chain sustainability refers to the practices that ensure the long-term economic, social, and environmental well-being of all stakeholders involved in the supply chain, from sourcing raw materials to delivering finished products.
One study shows that it balances business needs with societal and environmental requirements by addressing climate change, social responsibility, and ethical sourcing. Sustainable supply chains are becoming increasingly important for companies as consumers and investors demand greater transparency and accountability.
A study published on Science Direct shows that supply chain sustainability is crucial for the long-term success of businesses and the well-being of society and the environment. Besides, it helps to mitigate adverse environmental impacts and social inequalities, such as climate change and poor working conditions.
Another study published by SAGE Journals highlights companies that integrate sustainability into their supply chains are more likely to achieve higher financial performance and long-term competitiveness.
What is Meant by Supply Chain Sustainability?
Supply chain sustainability involves a set of practices and strategies that focus on reducing supply chain operations’ environmental and social impacts. It ensures the production and delivery of goods and services responsibly, promoting sustainable development.
According to a study published by Research Gate, supply chain sustainability requires collaboration between all stakeholders involved in the supply chain, including suppliers, manufacturers, distributors, and retailers.
Companies must take a comprehensive approach to create a successful supply chain sustainability plan. It involves working in partnership with suppliers, customers, and other stakeholders.
First, you should assess your current supply chain practices and identify improvement areas. Next, you must set specific goals and targets to reduce environmental impacts and improve social responsibility.
Besides, you must actively monitor and report progress, using a system to track your sustainability goals. You can identify areas requiring more attention and make necessary changes by continuously analyzing data.
Why is Supply Chain Sustainability Important to Today’s Supply Chain Managers?
Supply chain managers can leverage sustainability to create a competitive advantage for their companies, reduce costs, and enhance the brand reputation. A 2022 study published by Springer recommends using renewable energy sources, reducing waste, and promoting responsible sourcing can help reduce the carbon footprint of the entire supply chain.
In addition, as a supply chain manager, you can identify and manage risks related to sustainability issues, such as environmental disasters, labor disputes, and regulatory changes.
Your teams must have the skills and knowledge to implement and monitor sustainable practices. Training programs and communication campaigns can help raise awareness and engagement among employees and stakeholders.
For example, you can evaluate and improve the entire supply chain network, from product design to end-of-life disposal, and engage with all stakeholders to establish sustainability goals.
According to MDPI, managers can leverage technologies to reduce carbon emissions and improve efficiency. Data analytics can help identify improvement areas, optimize transportation and logistics, and reduce waste.
What are the Most Important Benefits of Supply Chain Sustainability?
Incorporating supply chain sustainability into your business can bring several unique benefits. It can help reduce your costs by reducing waste, optimizing energy use, and improving efficiency throughout the supply chain.
According to the Harvard Business Review, implementing sustainable practices can enhance your brand reputation and appeal to consumers who prioritize sustainability. It can also help you to differentiate your products and services from competitors.
Similarly, supply chain sustainability can help you to identify and mitigate potential risks, such as regulatory changes or disruptions caused by natural disasters or conflicts. The purpose is to protect your business and ensure long-term sustainability.
What are the Three Elements of Supply Chain Sustainability?
The three elements of supply chain sustainability are social, environmental, and financial. The social aspect of supply chain sustainability refers to the ethical and humane treatment of workers across the entire supply chain.
It includes promoting fair labor practices, safe working conditions, and protecting human rights. The second one focuses on reducing the negative impact of supply chain operations on the environment. It requires:
Financial is the third element of “supply chain sustainability.” It requires companies to optimize resource use, reduce waste, and adopt energy-efficient practices. The purpose is to achieve cost savings in the long term, minimize the risk of supply chain disruptions, and improve brand reputation. The following table will help you understand the importance and difference between these three elements:
Aspect | Requirements | Examples |
Environmental | Minimizing negative impact on the environment through sustainable practices | Reducing carbon emissions, optimizing resource use, minimizing waste |
Social | Ensuring ethical and humane treatment of workers and respecting human rights | Promoting fair labor practices, safe working conditions, and social equality |
Financial | Identifying ways to reduce costs and improve efficiency while maintaining environmental and social responsibility | Optimizing resource use, reducing waste, and investing in sustainable practices |
Gaining a better understanding of the risks associated with the business sector is essential. The first step will be to analyze the business context through a survey covering four key areas: human rights, fair labor practices, environmental progress, and anti-corruption policies. Following the initial analysis, a list of suppliers will be selected to confirm the risk level. Once all the relevant information has been gathered, a detailed report will be provided that includes an assessment of the main risks to your company, supplier control levels, and a list of recommended actions to reduce your overall risk.
Auditing a supplier serves two purposes: to verify compliance with your sustainable development standards before contract signature and/or to measure performance improvement over time. On-site audits are an effective way to assess the alignment of a supplier’s practices with the Sustainable Supply Chain (SSC) principles and to identify actions to address any risk. The advantage of on-site audits is that they reveal opportunities that may not be visible through phone or self-assessments.
At Global Partner Solutions, we don’t just identify risks. We will develop an action plan to improve the environmental performance of your suppliers. The outcome will determine priority actions and estimate the compliance gains.