M
"

Contents

Table of Contents

Download

Introduction

Methodology

Response to Crisis

Sustainability Pressure

SCS Has No Canon

Net-Zero Goals
Practices
Implications
Appendices
Copyright Notice

How Sustainability Efforts Respond to Crisis

Supply chain management is planning. It is a profession of anticipation and of careful coordination across suppliers and customers all over the world. But even the best-laid plans can be vulnerable to unforeseen disruptions. Four years of observation have afforded us the opportunity to study multiple global-scale supply chain disruptions and their effects on firms’ commitments to supply chain sustainability. What we have found is that commitment to supply chain sustainability during times of crisis appears to depend strongly on the nature of the crisis.

Figure 2 shows respondents’ answers to questions about how supply chain sustainability commitment responds to crisis in three different contexts: (1) Covid-19 in 2020 and 2021; (2) Russia’s invasion of Ukraine (asked in 2023); and (3) economic conditions in 2023. If we consider that the first three instances of this question were asking about acute network disruptions—that is, existing flows of inputs and outputs to customers were upended by global shutdowns in the case of Covid-19, and warfare and embargo policies in the case of the RussiaUkraine conflict , we see a generally similar and perhaps surprising response pattern. For the most part, if it changes, commitment to supply chain sustainability actually increases as networks suffer these acute disruptions. This counterintuitive phenomenon is something we have been observing and investigating for years now. It turns out that when circumstances compel firms to redraw their supply lines, many do so with a new emphasis on supply chain resiliency and sustainability. We have observed this to be true in two years of Covid-19 and now the first year of Russia’s most recent invasion of Ukraine.

But the pattern fails to repeat when survey respondents were asked about “fears of economic contraction in 2023”. In this case, the behavior is reversed. Whereas most firms report no change, among the change group, a higher proportion answered that their firm’s commitment to supply chain sustainability declined as a result of pessimistic economic forecasts this year.

One way to interpret these results is to consider the difference between a network disruption and an economic crisis. The former demands a new network, whereas the latter demands a leaner, more cost-effective one. Arguably, some sustainability investments reduce measurable costs in the long run. But in times of projected economic malaise, the long run recedes from worried supply chain planners’ field of vision. This appears to have had a chilling effect on many firms’ supply chain sustainability efforts in 2023.

Supply chain sustainability strategies that are driven by short-term thinking are susceptible to many different types of disruptions, from government regulations and economic conditions to other global influences. When our customers experience unexpected disruptions, we see that their strategies tend be steadied by their long-term sustainability aspirations and a continued focus on those future milestones.

Brittany Brama, Sustainability Manager, C.H. Robinson

Figure 2: When commitment to supply chain sustainability changes during crisis