· 5 min read
As outlined on August 9, 2021, in the Sixth Report of the Intergovernmental Panel on Climate Change (IPCC), the latest advances in science reveal the scale and intensity of climate-related disruptions and the disproportionate impact climate change has on marginalized communities in the world we share. In fact, over 80% of the underlying Sustainable Development Goals’ 169 targets are impacted by the climate emergency including gender equality, decent work conditions, arable land, and reducing inequities to ensure social, fiscal, and wage protection. 40% of the world’s population works in a supply chain. So supply chains represent perhaps the biggest opportunity to affect the 2030 sustainability agenda as businesses adjust to a post-COVID world.
Every system is perfectly designed to get the results it gets.
There are many lessons unearthed from the pandemic, including the inextricable link between operational performance and long-term value creation. Undoubtedly, two things stand out: the power of existential threats to impact our daily lives and the strength of collaboration when organizations around the world mobilize to solve complex problems.
Moreover, up to 85% of ESG-related impacts, including greenhouse gas emissions, occur in the supply chain, requiring cooperation and collaboration to effect meaningful systems change at scale. Not all profit is equal. Profits involving a social purpose are a higher form of capitalism, one that will allow our society to advance. With a shared sense of purpose, community prosperity and business performance can co-exist, but this requires disruption of the business-as-usual approach from design through operations across global supply chains.
Sustainability is a complex and often misunderstood web of interconnected systems and decisions. We see social unrest and corruption due to systemic inequities and want to make a change, but often lack transparency, an auditable chain of custody, and the ground truth to ensure a fair living wage and ethical trade. We see raging fires on one side of the globe and once in a lifetime erratic flood events occurring more frequently on another, but struggle to connect the impact of carbon emissions across supply chains in a holistic interconnected view that quantifies the human impact of climate change in communities we serve.
Sustainability isn’t someone else’s problem. Supply chains have been designed to iterate to the lowest cost, creating far-reaching networks entrenched with a web of assumptions whereby risks tied to non-financial performance have been externalized, leaving communities and trading partners paying the price for unsustainable behavior. Moreover, sustainable benefits realized through optimization and lean levers have been largely consequential and incremental, not intentional and inclusive. This is rapidly changing as businesses redefine the total costs of ownership and the gate of responsibility creates a renewed lens of value and stewardship: how we quantify a quadruple bottom line that not only transforms sustainable economies but also the lives of people who stand up to our global supply chains.
As paradigms shift and regulatory environments adapt, frameworks like TCFD and Lieferkettengesetz will become fundamental expectations in global trade. One thing is clear: sustainable supply chains can bridge the gap between ambition and acting for global change. Building resilient communities means holistic steering is needed as supply chain leaders navigate climate restoration, network stewardship, and building responsible, equitable supply chains.
1. Meaningful and measurable change requires visibility.
Supply chain organizations have become foundational to delivering new value using the SDGs as a roadmap for creating benefits and equity that leave no one behind. 80–90% of the data needed for SDG and ESG steering exists in supply chains. You can’t fix a problem if you can’t see it. Some problems are so ubiquitous and ingrained that they are assumed to be an inherent risk of business. A significant share of human rights violations occurs beyond the tier-1 aggregator in raw material extraction and agriculture, making due diligence and traceability challenging. Managing a multi-enterprise supply chain through a new lens of value means designing out network risk, marrying disclosure and self-audit with a sense for ground truth, and incorporating new environmental impact factors in supply chain buffers that promote anti-fragility. Tri-sector partnerships, designing for process harmonization, and the use of cognitive interventions can help organizations create reliability and trust from the field to the factory to a customer’s front door.
2. Instead of constantly looking back, lean into leading indicators.
An organization’s purpose, sustainability, and ethics have become measurable performance indicators, whereby carbon can be a leading indicator for operational excellence and demonstrable environmental gains. Businesses with lower emissions show leadership in designing for the environment, deliberate product design and raw material selection for zero-waste, process and operational efficiencies, and scope collaboration toward network-based SBTs. Additionally, diversity, representation, and supplier experience can be leading indicators for innovation, inclusion, and well-being.
To effectively use this data, cross-industry, multi-enterprise ecosystems, and platforms require shared visibility, interoperability, and a verified chain of custody for data aggregation. Agile operating models can help organizations realize near-instant insights for transparency across an entire organization and its ecosystem.
3. Going far together means technology must document proof of stewardship and be a companion in decision orchestration.
A company’s ability to realize business objectives is tied to others realizing theirs in the communities they serve. Bridging the gap in insights across global supply chains means technology must become a conduit to document proof of performance, influencing changed behavior in decision orchestration at scale. An alignment of purpose, ethical supplier model, touchless operations, and digital networks are powerful differentiators. The biggest impact is upstream by connecting the 1st mile and last mile for sustainability in supply chains for CPG companies. By connecting disparate systems, data, processes, behaviors, and partners in an ecosystem, technology can facilitate multi-stakeholder cooperation in AI, data, and analytics to influence stewardship for end-to-end ethical behavior and risk insights. The automation of slow points in due diligence across direct and indirect operations, together with financial insights that extend through the value chain, allows decision-making based on immutability and trust. Measuring and disclosing social impact has never been more important. Technology helps organizations move from footprints to handprints.
Trust, transparency, visibility, and collaboration are key to transitioning from a linear way of working to a sustainable, climate-restorative, and responsible world that puts equity – for all - at its center.
“To make life a little better for people less fortunate than you. That’s what I think a meaningful life is. One lives not just for oneself, but for one’s community.” ~ Ruth Bader Ginsberg
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.
