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Benefits of Sustainable Supply Chains

Increasing the sustainability of a company’s supply chain has many benefits. Among these are better employee satisfaction and talent attraction. Recent studies show that employees want to work for companies with an impeccable ESG record. Moreover, two-thirds of respondents avoid employers with a negative image on environmental issues. In addition, supply chain sustainability can reduce costs associated with recruitment, attrition, and compensation.

The key to improving a supply chain is to work with suppliers to understand their goals and expectations. By doing so, you will be able to gain insight on their needs and suggestions for improvements in your products and services. Moreover, you’ll get valuable partners in the process. Once they know what you’re aiming for, they’ll be more likely to support your efforts.

Resilience is another important benefit of sustainable supply chains. Companies with more resilient supply chains can increase output capacity by 25 percent and reduce product development cycles by 60%. They will also enjoy greater cost control and brand loyalty. While most organizations desire resilience in their supply chain networks, they face challenges that keep them from realizing this goal.

Companies must ensure that their suppliers are committed to sustainable practices. By ensuring transparency and collaboration between buyers and suppliers, they can avoid or mitigate risk and protect their businesses. Further, this makes it easier to identify and respond to crises. Companies should also measure their own attitudes toward sustainable procurement by participating in the Stanford Value Chain Innovation Initiative. It includes surveys of suppliers and buyers worldwide, and the responses reflect the needs of diverse industries.

In recent years, stakeholder pressure has grown on companies to improve the sustainability of their supply chains. Shareholder resolutions on sustainable supply chains have reached record numbers, while Global Reporting Initiative (GRI) G4 Guidelines have mandated greater attention to sustainability throughout the supply chain. These actions not only promote social and environmental values, but also increase productivity and profits. By investing in sustainable supply chains, companies can reduce their carbon footprints.

Sustainable supply chains are increasingly important in today’s global economy, as the environment continues to change. Sustainable companies consider human and environmental impacts throughout their entire supply chain, from raw materials sourcing to production, delivery, and even the end of the product’s life cycle. For instance, using environmentally friendly materials, reducing carbon emissions, and eliminating the need for toxic chemicals is key to being environmentally conscious.

Incentives are another key element in sustainable supply chains. Companies such as Nike have implemented sustainable farming programs to improve the productivity of their suppliers. As a result, they reduced their water use by 30% and improved the lives of their workers. Furthermore, they increased compliance with their sustainability goals. Sustainable practices are also important in the fashion industry.


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