If you want to reduce your business’s carbon footprint and become more environmentally friendly, then making your supply chain more sustainable should be sliding up the priorities list.
A sustainable supply chain will not only lower your business’s environmental impact, but also makes good financial sense too.
Here, we explain why sustainability in your business supply chain is important and how to introduce sustainable practices.
Click the links below to take you to each section of the guide:
- What is a sustainable supply chain?
- Why is a sustainable supply chain important?
- How you can influence sustainability in your supply chain
What is a sustainable supply chain?
A supply chain is the network of companies, facilities and services involved in developing, manufacturing, and delivering a business’s products or services. It’s possible that it accounts for a significant chunk of your business’s outgoings, resources, and unnecessary waste.
A sustainable supply chain is one that will use environmentally and socially sustainable practices at each stage of the chain. This means that each business you deal with (and the ones they deal with) protects people, environments, and upholds sustainability standards for their own operations and their suppliers’ operations.
The three main pillars of a sustainable supply chain:
- Financial sustainability: How a sustainable supply chain supports your business’s long-term profitability and ensures a satisfactory income to all stakeholders.
- Environmental sustainability: A sustainable supply chain should aim to release as few greenhouse gasses as possible.
- Social sustainability: Sustainability within the supply chain considers issues such as working conditions, fair labour practices and health and safety.
Why is a sustainable supply chain important?
Introducing sustainable measures within your supply chain creates a number of opportunities to bring about real and positive change within your business. As such, there are a number of reasons why a small business owner would want to make improvements to their supply chain, including…
Increasing legislation:
- All public sector agencies will have hard carbon-reduction targets and codes to abide by, meaning they have to be very selective with the business they work within their supply chain. And while private businesses don’t usually have legal targets, they often have elective and self-mandated targets, meaning they still need to consider their suppliers’ sustainability credentials.
Consumer interests:
- Working on developing a more sustainable supply chain could help you attract new customers. In recent years, there has been greater media attention around green practices and supply chain sustainability, particularly for larger organisations. As a result, consumers are now more aware of unethical practices and are increasingly choosing to buy from sustainable businesses. So much so that 55% of people said they were willing to pay more for sustainable and ethically-sourced products.
Climate change impacts:
- Now more than ever, we’re witnessing a record number of floods, heatwaves, droughts, and storms, which all have a huge impact on local and international supply chains. A recent survey from the Business Continuity Institute found that 42% of respondents stated that extreme weather events had resulted in supply chain disruptions. As a result, more businesses are seeing the need to strengthen their supply chain resilience for future global warming impacts.
Improved production:
- A sustainable supply chain can simultaneously reduce your carbon emissions and improve productivity. By investing in sustainable practices and reducing waste from the process, businesses can benefit from greater efficiency and reduced production costs. Introducing sustainable measures can also help manage and mitigate different types of risks across your supply chain. Such risks can include product quality, resource cultivation, transport, work conditions and environmental damage.
How you can influence sustainability in your supply chain
There are many ways and areas that you can integrate sustainability into your supply chain. We have detailed some steps to help you get started:Calculate your business’s carbon footprint:
- This will allow you to benchmark where you are now, so you can set clear sustainability goals for the future. We have created a free, easy-to-use carbon footprint calculator, which you can download here.
Review your supply chain and identify issues:
- Focusing on waste, carbon footprint, health and safety and labour conditions, identify all of the elements you think could be improved and/or simplified. Consider each supply chain element in various scenarios to understand where you can make efficiencies. You might find that issues are not immediately apparent, so it’s important to take your time and fully analyse each element of your supply chain.
Communicate with suppliers:
- Engage suppliers and communicate sustainability expectations through a supplier code of conduct. Any supplier in your chain who has achieved ISO14001 will already be following strict environmental standards. And while you can’t directly control your suppliers’ operations, you can influence them by making sustainability part of your regular conversations and sharing the costs of improvements if you can afford to do so.
Measure the effectiveness of the changes:
- It’s important to set clear goals and ensure that you’re monitoring your supply chain sustainability efforts. This is the only way to know if your improvements are making a difference or if you need further work. It’s also a good idea to communicate your goals to customers and stakeholders – and remember to shout about your achievements.
If you found this page useful, visit our net zero hub for more free tools, tips and expert advice.
Please note, SSE Energy Solutions has written this blog for information purposes only. We recommend speaking to your own business and financial advisors before taking any direct action that will impact your business.
