PwC’s 2013 Global Supply Chain Survey provides new insight into the role of sustainability in supply chain management. This year’s global supply chain survey shows how Leaders are moving ahead of the pack. They’re tailoring their supply chains to customer needs and investing in next-generation capabilities, including sustainability considerations, while keeping the focus on supply chains that are both fast and efficient.
More than two-thirds of all respondents say sustainability will play a more important role in the supply chains of the future. A number of companies have already started (1) investing in technologies to reduce their carbon dioxide emissions and (2) excluding any supply chain partners that don’t adhere to the highest ethical standards. But such examples are not yet widespread — aspirations tend to exceed action unless there is a clear cost reduction benefit or regulatory requirement being met.
To date, most firms have done very little on the sustainability front, but demand for sustainable products manufactured with sustainable raw materials is increasing; indeed, it now outstrips supply. Investors’ expectations are also rising, and manufacturing regulations are getting tighter. At the same time, greater use of low-cost and best-cost country sourcing is making it more difficult to control sustainability through the entire supply chain. And though a company can outsource specific business activities, it can’t abdicate responsibility for them.
At present, respondents see four main reasons for investing in sustainable supply chain management: to manage the risk of unintended environmental or social damage, to manage their company’s reputation and the expectations of its shareholders, to reduce costs and realize productivity improvements and to create sustainable products, thereby increasing revenues and enhancing the corporate brand.