Inbound Logistics | January 2023

GREENLANDSCAPE [ INSIGHT ]

by Katie Martin Sustainability & ESG Principal, Avetta katie.martin@avetta.com | 800-506-7427

5 Ways to Strengthen and Future-Proof Your Supply Chain

In recent years, environmental, social, and corporate governance (ESG) practices have become a critical aspect of any company’s reputation and success. Consumers don’t care just about what they are purchasing; they also care about how the product or service gets to them. For instance, an Edelman study shows 64% of consumers worldwide will buy or boycott a brand solely because of its position on a social or political issue.

including health and safety, human labor rights, environment, climate change, and governance. It then assesses these risks in accordance with government regulations, generates risk proles, and creates recommendations and solutions based on the risk prole. 2. Set quantifiable supply chain sustainability goals. It’s difcult to track progress without measuring it. One of the rst steps leaders need to take is to evaluate the current state of their company’s ESG compliance and the impact of its supply chains. Once leaders establish this critical baseline, they should set measurable targets and deadlines for meeting those goals. HeidelbergCement is a prime example of setting quantiable goals to decarbonize its supply chain. The company’s overarching goal is to offer carbon-neutral concrete across its product portfolio by 2050. HeidelbergCement has set a specic intermediate 2025 target to reduce its net CO2 emissions per ton of cement by 30% when compared with the company’s levels in 1990. 3. Improve supply chain traceability and transparency. The culprit of many ESG issues, especially in complex supply chains, may be

such as the industry, company size, global scale, and company-specic decisions. Therefore, each supply chain presents different risks related to ESG compliance. Company leaders must evaluate their suppliers and the potential impacts their supplies, products, or services could have on the environment and society. While general materiality and strategic management indicators are available by industry through agencies such as The Value Reporting Foundation and GRI, most companies must build upon existing best practices to develop a customized system for monitoring and managing these risks. CRH, a company offering sustainable building materials and solutions, has done just this. It uses a matrix approach to develop heat maps that classify its suppliers based on 12 assessment criteria,

The responsibility to act in accordance with ESG practices doesn’t end with your company’s own procedures and processes. It is making its way upstream to include all activities in the supply chain leading up to nal product delivery. That’s right. Company leaders now need to monitor and regulate the operations of any business involved in their supply chain. It is immaterial to many external stakeholders if suppliers’ unethical practices are not your company’s fault. Your company also risks damage to its brand and reputation, regulatory penalties, and civil and criminal liability. To protect against these risks, and strengthen and future-proof your supply chain, take these ve measures. 1. Assess, manage, and monitor ESG supply chain risks. Every supply chain is different, depending on factors

86 Inbound Logistics • January 2023