Earlier this year I attended JDA’s annual user conference where Rich Beck, the Sr. Vice President of Global Operations at PepsiCo, commented that the company’s supply chain goals included “digitizing the value chain” and “sustainability.”
My colleagues and I have been covering supply chain management for twenty years. We hear many, many supply chain speeches. None of us can ever remember hearing a top supply chain executive saying sustainability was one of their top goals. In fact, sustainability is rarely mentioned.
And yet according to the Governance and Accountability Institute, 72 percent of the companies included in The S&P 500 Index publish sustainability reports, up from just under 20 percent in 2011.   There appears to be some difference between what companies are proclaiming publicly and what supply chain practitioners are witnessing in day-to-day operations.
The ARC Advisory Group recently published a strategic report that looked at sustainability from a business perspective. The report was based upon numerous interviews with subject matter experts and includes survey research concerning energy management.
The report answers the following questions: How far have sustainability projects that impact the supply chain organization advanced? What do supply chain executives need to know about sustainability and when do they need to know it?
Here are a few key conclusions.
  • Most supply chain executives are currently minimally impacted by sustainability initiatives. P
  • Sustainability is a rising tide. In particular, once organizations have committed to sustainability initiatives, their commitments tend to grow over time. And an important customer that expands its commitments can force its suppliers to embrace sustainability or lose their business. An increasing number of large companies are doing just that.
  • Supply chain executives would be well advised to start familiarizing themselves with a few key concepts. Among the most important is the tiered, “Scope” concept.
Sustainability scopesExecutives Need to Understand Scopes 1, 2, and 3 and Where Their Competitors and Key Customers are on that Journey
(Source: Greenhouse Gas Protocol)
If you’d like a copy of this report, you can contact my colleague Conrad Hanf. His email is chanf@arcweb.com.