Worldwide, commerce is evolving. Stakeholders—including customers, employees, investors, and the general public—are increasingly interested in environmental, social, and governance (ESG) factors when considering the companies with which they do business. According to a 2018 Nielsen report, 66% of global consumers are willing to pay more for sustainable goods. So what does this mean for businesses? In order to remain competitive, companies must integrate ESG into their business practices, including their supply chains. Here’s a look at why a sustainable supply chain is so important and how you can enable one for your business.


What is a sustainable supply-chain?

A sustainable or responsible supply chain minimizes negative environmental and social impacts while maximizing economic benefits. In other words, it’s a supply chain that takes into account the triple bottom line of people, planet, and profits. There are a number of ways to create your sustainable supply chain management, but some common practices include reducing emissions, waste, and water usage, choosing environmentally friendly packaging, supporting renewable energy initiatives, working with suppliers that adhere to fair labor practices; and using recycled materials.


The advantages of suppliers sustainability management

There are many reasons why your company should take care of working on your suppliers sustainability practices.  To begin with, your business can help support the environment to improve the quality of life for the 8 billion people on Earth. Minimizing your company’s carbon footprint is not only the right thing to do, but also helps mitigate the effects of climate change. Implementing sustainability initiatives can also help you save money by reducing waste, increasing efficiency, and lowering energy costs. Sustainability is also good for business from a reputation standpoint. In today’s day and age, customers want to buy from companies that share their values—and that includes being environmentally conscious. By having a sustainable supply chain, you’re sending a clear message to your stakeholders that you’re committed to operating responsibly. What’s more, investors are taking notice of companies with strong ESG profiles and increasingly factoring these factors into their decision-making processes. In fact, according to Ceres’ 2020 Investor Survey on Sustainable Companies , 87% of institutional investors consider sustainability when making investment decisions—a 14% increase from 2018.


Enabling a sustainable supply-chain

Now that we have looked at some of the reasons why sustainability matters when it comes to your company’s supply chain, let’s look at how you can enable yours.

  1. Conduct an assessment of your current state. This will give you valuable insights into where your business currently stands in terms of its ESG impact.
  2. Conduct an audit to improve your suppliers sustainability. A great first step is to conduct audits of your current suppliers to see how they measure up on sustainability. Do they use sustainable materials? Do they have green manufacturing practices in place? Do they follow fair labor standards? Based on the results of these audits, you can decide which suppliers you want to continue working with—and which ones need to be replaced.
  3. Educate your employees: It’s not enough to make changes at the supplier level—you also need to educate your employees about why sustainability is important and how they can play a role in promoting it. This starts with senior leadership but should filter down throughout the entire organization. Everyone from customer service representatives to warehouse workers should understand why sustainability matters and what they can do to support it (within their specific job function).
  4. Make sustainability part of your company culture. To really drive home the importance of sustainability, make it part of your company culture. Sustainability should be woven into your company’s values, mission statement, and everyday operations. When everyone from the CEO on down is committed to operating sustainably, it’s much easier to make progress on this front.


Working on your supplier sustainability minimizes negative environmental and social impacts while maximizing economic benefits. There are many reasons why your business should care about having a sustainable supply chain, including reducing emissions & pollution levels; saving money by reducing waste & increasing efficiency; mitigated effects against climate change; improved reputation with increased customer engagement rates; and attracting new investments from impact-driven organizations & individuals. A sustainable supply chain is vital for any business that wants to operate responsibly and ethically. By understanding what sustainability means, researching different ways to operate sustainably, and developing a plan of action, you can take the first steps towards creating a more sustainable supply chain for your business.