Out of the Covid‑19 Crisis Came Opportunity

For the second year in a row, we observed that roughly 80% of respondents reported that the global pandemic did not slow their firms’ supply chain sustainability efforts. This surprising result left us puzzled until we explored it more deeply this year. It turns out that the supply chain crises triggered by the global pandemic actually brought new scrutiny, but with it also new resources and opportunities. As one executive told us, the pandemic provided “air cover” to take on projects that otherwise might not have been possible. Many firms utilized the opportunity presented by the crisis to make bold moves to improve their firm’s supply chain sustainability to, if nothing else, mitigate risk of disruption and improve their supply chain resilience.

A Steadily Increasing Heat with Occasional Flare‑Ups

Every dimension of supply chain sustainability that we studied has shown an increase over the three-year period of observation.

That data point alone speaks to the urgency of these issues. But, perhaps, more surprisingly, the heat ebbs and flows with time. In this case, the surge in commitment to social issues that we saw in 2020 plateaued, and environmental issues, which slowed down in 2020, came back strong in 2021.

The resurgence of interest in environmental SCS dimensions in this year’s data implies that firms whose focus in recent years was on social issues should take a longer view to the re-emerging focus worldwide on water conservation, natural resource conservation, and climate change mitigation. Importantly, supply chain sustainability itself does not appear to be a zero-sum competition between environmental and social issues. Rather, pressure on dimensions in both categories appears to be rising, with rates of acceleration periodically fluctuating between the two. The aphorism “A rising tide lifts all boats” is popularly attributed to John F. Kennedy in the context of economic policy. However, the same may apply to SCS priorities as well. In the three years of this study, we have only seen a rise in the aggregate pressure on firms to improve their supply chain sustainability, and we see no reason why this would decrease anytime in the near future.

Change Is the Only Constant

We observed that how firms prioritize different components of supply chain sustainability has changed over time and differs by geographic location—most markedly between the Global North and the Global South. We’ve also observed that the tools firms use to improve supply chain sustainability are evolving.

While it is possible to infer what causes different dimensions of supply chain sustainability to rise and fall in importance, this is perhaps of lesser managerial relevance than simply to know that it happens—and to put that state of constant flux on management’s radar. Unidimensional visions of supply chain sustainability investments that seem right to founders, or right for the customer base at a particular moment in time, do not seem long for this world based on what we have observed in three years of this study. Instead, our results suggest that firms must be ready to adapt their sustainability efforts to their contexts.

This implies that firms should be aware that as sustainability priorities change over time, their SCS efforts or profiles that attract and win business may not do so every year—even with the same customers. The data we’ve collected shows clear evidence of change over time in how firms prioritize the different dimensions of sustainability, especially in international contexts. Therefore, supply chain managers working with overseas vendors and customers would be wise to keep in mind the different prioritizations of SCS dimensions we see across various regions as they forge and maintain those relationships.

The mercurial nature of the hierarchy of SCS priorities, however, is underscored by the magnitude of the danger we face from not addressing or ignoring our sustainability challenges. That is, the effort to make our supply chains more sustainable may take place on different “fronts”, of which any or all may intensify or abate over time, but the gravity of the danger we face by neglecting sustainability on any front is immense and omnipresent. Thus, firms that fail to pivot accordingly do so at their own peril; they risk losing not only their competitive advantage, but they also contribute to a much larger and existential risk for our shared planet.