Almost one-third of businesses worldwide plan to make sustainability-related changes to their supply chains over the next three years, research from HSBC has found.
After surveying 8,500 companies in 34 markets, the banking giant found that new financial benefits are the main motivators behind these plans.
Of those making ethical or environmentally sustainable changes, 84% said cost efficiencies were one the main reasons for doing so, while the same number cited improved revenues and financial performance.
HSBC said, that with around 80% of ‘green credentials’ found in supply chains, business partners could play a critical role in a firm’s reputation and performance.
‘Transitioning to become more sustainable is not only beneficial for the environment and society, but for the bottom line too,” HSBC global head of client coverage, Bryan Pascoe, said.
“As businesses explore and invest in ways to stay competitive for the future, the most forward-thinking are already taking action.”
The survey found that transparency is a key consideration for more than a quarter of companies when seeking new suppliers.
This comes at a time when customers increasingly want to know where the products they buy come from, and how people, animals and the environment have been treated.
In addition, regulators and investors are putting more pressure on companies to disclose their sustainability practices, perhaps explaining why 85% of firms want to achieve a standard recognised by their sector.
One in five companies claim to have taken greater control of their supply chains over the last two years, while 17% say they reduced their impact on the environment over the same period.
Firms in emerging markets are particularly keen to increase their ethical and environmental standards, with more that 21% planning to make improvements over the next two years, compared with 15% in developed economies.
“This presents a timely opportunity for businesses to assess their networks and take action to become more sustainable, which can help them remain competitive in an increasingly demanding trading environment, “ HSBC said.
“The transition to a more sustainable future has many benefits to businesses, and banks have a role to play too.”
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