STATE OF SUPPLY CHAIN SUSTAINABILITY 2022
Adjustments and Equilibriums
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Thursday 13 Oct 2022
5:30 – 8:00 PM
MIT Welcome Center
The Promise of Supply Chain Sustainability
Trending and Future Applications for Business
How is the practice of supply chain sustainability (SCS) evolving globally? How is SCS driving change across business functions? How has the global Covid-19 pandemic affected firms’ sustainability efforts, and what does this imply for approaches to future global disruptions?
Join MIT CTL’s State of Supply Chain Sustainability research team alongside thought leaders from Avetta, Blue Yonder, C.H. Robinson, the Council of Supply Chain Management Professionals (CSCMP), and project44 for an interactive dialogue about the current state of global supply chain sustainability and its implications for the future. Free: Registration Required
If there is one characteristic that sums up the state of supply chains today it is the need to navigate extreme change. Our research over the last three years culminating in the 2022 State of Supply Chain Sustainability Report shows the same can be said for supply chain sustainability (SCS). SCS is a moving target.
For instance, over the last three years consistent pressure to pursue SCS goals has come from various stakeholders, but the relative level of pressure associated with each stakeholder has changed over time. This year, company executives and corporate buyers top the league of advocates. As one of the executives interviewed for this year’s report commented, customers want to buy from companies that are investing in, and are committed to, SCS. Geographically, the Global North and the Global South give different weightings to the components of SCS. For instance, the North shows stronger commitment to climate change mitigation than does the South. This is the first year we have tracked differences between SCS goals across regions of the world—supported by a multilingual survey questionnaire—so it will be interesting to see how these disparities evolve over future years.
While the individual components of SCS may be in a state of flux, overall, the importance of sustainability in supply chains continues to trend upwards. The dimension that showed the most positive change is climate change mitigation. Supply chain circularity also gained favor in 2021. The adoption of technology and practices to support SCS goals also appears to be on the rise. Our latest research suggests that supplier audits, supply chain mapping, and codes of conduct are the most prevalent practices regardless of firm size.
The steady rise of SCS as a corporate issue may come as no surprise to many supply chain professionals. Our research for the 2022 report affirms supply chain’s increasingly important role as a champion of corporate sustainability—a trend we highlighted in last year’s report. Given their key role in supporting sustainability goals, it is incumbent on practitioners to keep abreast of the many agents of change in this area, whether they be inspired by media channels, shifting consumer sentiment, or unexpected disruptions.
However, while SCS may be enjoying more support as a corporate goal, its growing popularity does not necessarily translate into investment dollars. As was the case in previous years, on every dimension SCS goals ranked more highly than investment in 2021. Still, the investment picture is not unremittingly gloomy. There are tentative signs that the gap is closing in some areas, notably in human rights protection.
What does 2022 portend for the future of SCS? We have no reason to doubt that SCS will continue to gain importance in the near term. Even the Covid-19 pandemic and its aftermath did not arrest this trend. For the second consecutive year, about 80% of respondents reported that their firms were undaunted by the global pandemic. Moreover, our research suggests that one of the pandemic’s legacies is to promote new thinking in key supply chain areas such as SCS.
The Rubik’s Cube of SCS components may continue to change, but sustainability practices and capabilities in supply chains appear to be maturing fast while gaining momentum across firms of all sizes.
Global respondents to the survey
Said Covid-19 had no impact or increased SCS commitments
Increase in pressure from investors to improve SCS
Increase in commitment to climate change mitigation
“Supply chain management has never held a more critical and influential role in the world than it does today, and organizations are rising to the challenge. To mitigate ongoing supply chain disruptions, the leaders in the space are becoming more conscientious and intentional in their supply chain monitoring. As a result, we’re not only seeing a rise in sustainability tracking, but also, a push for evaluating all risks, including ESG, safety, business risk and much more, in one centralized location for greater transparency.”
Danny Shields, Vice, President for Sustainability & Risk, Avetta
“In the face of constant disruptions, leading companies worldwide are urgently redesigning their supply networks and ecosystems to not only address business continuity and resilience, but also to improve their supply chain for sustainability, which is a very high priority for internal and external stakeholders alike.”
Hong Mo Yang, Senior Vice President – Industry Strategy, Blue Yonder
“Supply chains are so complex that no one can tackle sustainability alone. Collaborating with the right partners who have the right technology is essential.”
Rachel Schwalbach, Vice President for Environmental, Social & Governance, C.H. Robinson
Mark Baxa, President, and CEO of CSCMP
“We see our clients moving towards practices that will improve transparency—notably supply chain mapping and codes of conduct. There is a strong desire to contribute to ESG values, and it goes beyond technology. We believe you have to incentivize the entire supply chain ecosystem to be transparent and open.”
Rob Barrett, Principal, US Supply Chain Advisory, KPMG LLP
“Customer demand is a major driver of supply chain sustainability initiatives. Firms we work with are looking for ways to reduce supply chain emissions and adopt more sustainable practices in response to that customer demand. This is the case even in markets where regulatory pressures are not as ambitious.”
Christian Piller, Vice President for Research and Sustainability, project44