Inbound Logistics | January 2023

PLAN AHEAD FOR 2023

SEEKING SUSTAINABILITY

NOTES ESG (environmental, social, and governance) has become a high- priority corporate objective in recent years. Sustainability is growing in focus with regulations and legislation around the world coming into force. Nevertheless, most organizations have not set formal policies and have made little real progress. Greenwashing has become common, and consumers and governments are increasingly critical of perceived greenwashing. As a result, in 2023 businesses will place a growing focus on making tangible gains on sustainability, reducing carbon emissions, and increasing reusability of their products. To achieve this, organizations will need to put in place processes and systems to better baseline their current carbon emissions and progress against goals. Additionally, they will need to more eectively and eciently collaborate with suppliers to reduce scope 3 emissions (those produced by the supply chain), which constitute an average of 70% of a business’ emissions. –Alex Saric, CMO, Ivalua

PREDICTIONS

Many enterprises will reignite their sustainability efforts by rening their business cases. However, EY survey ndings showed: One-third of the participating companies lack a business case. Business cases should take a holistic approach to sustainability, focusing on cost reduction, revenue growth, risk management, and intangibles such as customer loyalty. We anticipate companies will look beyond procurement as they pursue sustainability. For instance, 27% expect delivery/ logistics to make the most progress in sustainability into 2024. –Sumit Dutta, Supply Chain & Operations Leader, EY Americas I anticipate increased regulation and emphasis on improving global supply chain labor and human rights practices. In terms of mandatory human rights due diligence laws, I foresee an increased focus on industries related to conict minerals, rare- earth minerals, and lithium. As EV production rises along with the integration of microchips, this means using more lithium. I’m curious to see if legislators will allow it in countries where mining was previously banned. In the case of the United States, will we remain reliant on China (sources 90% of the world’s lithium), which will bring more focus on the human rights aspect of ESG? That being said, I expect global reporting initiatives requiring human rights disclosures to become more prevalent.

OVERVIEW

Manufacturing leadership teams are under pressure to enhance the sustainability, performance, and resilience of their operations as a result of a more unstable world economy. Manufacturers are seeking to enhance traceability across operations for greater sustainability, productivity, and transparency in their supply chains as a result of this mounting demand. Industry leaders can contribute to the movement toward a greener future while lowering waste and operational costs by enhancing sustainability in their supply chains. Many manufacturers are still essentially blind to an astonishing percentage of events on the factory floor and in supply chains. The rise in black swan events and economic disruption will finally force them to increase their focus on improving traceability in order to meet their sustainability goals and weather the economic storm. As a result, ESG will thus be more thoroughly integrated and assessed by business systems. –Doug Lawson, CEO, ThinkIQ Circularity (making products with an eye toward end-of- life use) and supply chain transparency will be critical for retailers, especially as EU regulations will mandate companies to provide details about their carbon footprint. –Margaux Herbet-Saada, Product Marketing Manager, o9 Solutions Circularity

–Rick Dorsett, Director - HSE Review and Verication & ESG, ISN

TREND TO WATCH

In 2023 more enterprise businesses will work to make sustainability more operational and a more achievable goal. In addition to managing service time and cost, the emissions impact will be key for managing businesses. We should see more executives creating an ESG culture, starting inside and demonstrated outwardly, that promotes the importance of making sustainable business decisions. Strategic economic and emissions decisions will be made not just because of upcoming SEC reporting changes mandating that large public companies will have to report scope 3 emissions by 2025, but because it’s the right thing to do. Many transportation companies will seek out reliable, credible data providers for the collection of data they will need to analyze in order to set sustainability goals across all modes, lanes, vehicles, and regions.

–Josh Bouk, President, Trax Technologies

220 Inbound Logistics • January 2023