Implications of the State of Supply Chain Sustainability 2023

In some cases, how supply chain sustainability is understood and how it is practiced differed greatly across our respondent bases. We observe differences in the answers to certain questions depending on when the data was collected, the prevailing global circumstances, a respondent’s industry position, and their geographic location. At the same time, however, other questions elicited remarkably consistent trends over time. Indeed, sustainable supply chain management contains multitudes.

In our observation, commitment to supply chain sustainability endured the difficult supply chain upheavals presented by Covid-19 and Russia’s invasion of Ukraine. In fact, commitment to supply chain sustainability appears to sometimes thrive when supply networks are unexpectedly broken. But fears of economic contraction in 2023 turned out to be a more pernicious kind of supply chain disruption. Commitment to supply chain sustainability appears to wither when overall economic health seems to be in jeopardy.

Nevertheless, the pressure that firms feel to improve their supply chain sustainability does not abate, even when economic circumstances change for the worse. All the sources of pressure that we track show year-over-year increases compared to 2019, even when facing the economic headwinds of 2023. For the most part, sustainability-conscious creditors and B2B customers appear to give no quarter to supply chain managers during these economic hard times. Documented sustainability efforts continue to be an important part of doing business.

This year, we chose to focus on one particular type of supply chain sustainability effort: net-zero goals. We found net-zero goals to be widely adopted among firms in rich countries but less so in comparatively lower-income regions of the world. This reveals a concerning disconnect ; net-zero goals reflect the commitment to address the global climate crisis. But in modern practice, net-zero goals appear to be applied with a much more limited scope, and mostly in very wealthy countries.

Some net zero reticence may reflect the particular challenges of measuring and reducing Scope 3 emissions. We see in our data that Scope 3 emissions are the hardest to measure and to reduce. A current lack of clarity around methods for measurement, policy requirements, and how to incentivize supply chain partners to share greenhouse gas emissions data may all be slowing down greater adoption of net-zero goals and Scope 3 emissions reduction targets around the world.

At the end of four years, a student graduates, an old administration leaves office, and a new one comes in. Past achievements are tallied—and so too is what is left to be done in the next four years. In the words of Walt Whitman, one looks ahead to filling one’s “next fold of the future.”

We submit these observations to this readership precisely because supply chain management is at its core a planning exercise. Supply chain managers must anticipate the needs of their firms, and adapt the flows of goods, information and currency to meet those needs given the sometimes unpredictable exigencies of the changing world around them. Such plans require timelines that cross calendar years, myriad global crises, and international borders. As a domain, supply chain management was already large. The challenge of supply chain sustainability expands this already broad field of vision even further. Sustainable supply chain management indeed contains multitudes.