Limited sustainability reach throughout global supply chains
Efforts to apply sustainability practices throughout supply chains are having a limited reach, covering only a small section of the materials used.
A paper published in the journal Proceedings of the National Academy of Sciences reveals 52% of global companies incorporate sustainable sourcing into their business operations.
However, more than 70% of these practices only cover a subset of input materials for a given product, leaving the remaining upstream impact unaddressed.
“Advancing environmental and social goals in supply chains can quickly become very complex,” study co-author and postdoctoral fellow at the Stanford Graduate School of Business, Joann de Zeghar, said.
“This complexity is reflected in our findings that companies use a broad range of strategies and that current efforts have limited reach.”
The study of 449 publicly listed companies highlights how global supply chains will be key to achieving UN sustainability goals, touching more than 80% of trade and employing more than a fifth of workers worldwide.
Despite this, it was found that almost all sustainable sourcing practices address only a single tier in supply chains, such as the textile factories that sew T-shirts, ignoring remaining processes like dying the cloth or growing the cotton.
In addition, the researchers found more than a quarter of these practices apply to only a single product line, and that just 15% focus on health, energy, infrastructure, climate change, education, gender or poverty.
However, the findings show that putting companies under pressure makes them “significantly more likely” to adopt sustainable sourcing practices, with a higher number of businesses doing so in countries with many active NGOs.
“The pressure consumers put on firms when they demand more sustainable products might be paying off,” study lead author, Tannis Thorlakson, said.
“I hope this paper acts as a call to action for those 48% of companies that aren’t doing anything to address sustainability challenges in their supply chain.”
Image credit: iStock
Chris Seekings is a reporter for TRANSFORM