Making a business case for sustainable supply chains

In a challenging commercial environment, all eyes go to the bottom-line. Nice-to-have ideas quickly drop down the list in favour of core concerns like profitability, service and cash flow. Sustainability sits in an as-yet-uncertain middle ground – brands talked a big game in the era of low interest rates and ethical scrutiny, but when the chips are down, some may be inclined to push green initiatives onto the back burner.

In reality, this is a false economy – while businesses may be inclined to delay their engagement with sustainable change, the reality is that a lack of investment in this area today is setting up issues in the future. Whether it’s falling foul of public sentiment, inefficient processes losing margin or creating future regulatory liabilities, businesses need to prioritise transitioning to green supply chains before they’re pushed.

We sat down with David de Picciotto, CEO and Co-founder of emissions management platform Pledge, to discuss why now is the time to move and how supply chain leaders can make the case for change.

Why now for sustainable change

‘Everyone recognizes that sooner or later… they’ll have to do something to demonstrate their sustainability credentials,” says David. Indeed, the conversation around sustainability has been growing in volume for the last decade, and regulators and business leaders are increasingly putting their money where their mouths are.

Beyond the ethical and environmental imperatives, sustainability offers tangible commercial benefits for businesses who engage proactively:

• Future-proofing compliance: Regulators are developing increasingly stringent measures to force brands to measure and reduce their carbon output.
• Customer sentiment: Sustainability has a key impact on brand loyalty, with consumers increasingly concerned about the social, environmental and ethical costs of their products.
• Investor engagement: “An increasing proportion of investors have certain ESG mandates.” says David. As financial institutions expand their due diligence in allocating capital, the ability to demonstrate your green bona-fides can make brands a more attractive investment opportunity.

Charting a path forward

Embarking on a sustainability journey can seem vague and undefinable, but the key lies in understanding your current emissions output and defining clear objectives to reduce them. 

David suggests a foundational approach: “It starts with understanding what you want to achieve and where you’re starting from.” 

There are a range of frameworks available, including:

• Science-Based Targets Initiative (SBTI): A framework developed by various bodies, including the UN, which sets specific emissions reduction targets in line with the goals of the Paris Agreement.
• Carbon Accounting: Systems and standards that help businesses measure and manage their carbon footprint.

Emissions Reductions Targets Framework: Systems that help businesses set and achieve specific goals for reducing their greenhouse gas emissions.

• Corporate Sustainability Reporting Directives (CSRD): A regulation set to roll out in Europe that will require certain companies, especially listed ones, to report on their carbon emissions, including those from their supply chains.

The right fit for your brand will depend on the market, responsibilities and customer-concerns that apply to your business, tailoring your sustainability journey to your unique operations, goals, and challenges.

Building the business case: practical steps for supply chain leaders

Change management is challenging – creating a new framework for success beyond traditional metrics is even moreso. Leaders looking to create a roadmap for sustainability need to contend with complex regulations, securing C-suite buy-in, balancing immediate costs with long-term benefits, and aligning diverse stakeholder expectations. This requires buy-in across the whole organisation and a concerted, coordinated effort. 

1. Educate and Align: The first step is considering sustainability as another KPI within your organisation, rather than rethinking your business. This requires integrating it into your existing mission and values – what you stand for as a company –finding common ground with the drivers already in place and adding an additional dimension.
2. Measure and assess: Every initiative must start with a baseline for success. Using tools such as Pledge, businesses can create a data-driven picture of their existing sustainability footprint, across various sources, from which to set realistic goals and track progress.
3. Engage Stakeholders: Sustainability isn’t a solitary journey. This means engaging with stakeholders, from employees to suppliers with a shared vision of success and process.
4. Stay Updated on Regulations: With regulations like the Corporate Sustainability Reporting Directives (CSRD) looming, staying informed is crucial. Any strategy should be ready to evolve with the demands around your business,
5. Seek support: If sustainability is new territory, most businesses will need external expertise. Whether it’s hiring a consultant or partnering with platforms like Pledge, external insights can provide a valuable sounding board for developing your strategy. 

Finding the right partner for sustainable supply chain management

Executing a sustainability strategy starts with the right data and visibility, combined with the right support to implement changes in your supply chain. 

Zencargo works with leading brands in a range of industries to help them measure, analyse and improve their sustainability performance with robust data and innovative freight forwarding solutions. Partnering with Pledge, we offer businesses a comprehensive solution to integrate sustainability into their supply chains, from tracking historical shipment data to providing offsetting options, Zencargo empowers businesses to make informed, sustainable choices.

To find our more about how your business can prioritise sustainability while still achieving commercial targets, get in touch with our team today.