Sustainability as a supply chain priority is here to stay, according to an international survey where 81% of companies said they are focusing more on sustainability today than they did three years ago.
The survey was conducted by global third-party logistics provider, Coyote Logistics. About 250 global shippers across various industries, company sizes, verticals and seniority levels were polled about how they approach sustainability and where they see opportunities to do more.
“Sustainable practices and operations are now the expectation among customers and key stakeholders,” said Mike Sinkovitz, senior vice president of Coyote Transportation Management. “As a result, supply chain professionals need to prioritize these initiatives across their entire networks to achieve continued success.”
Last year, Larry Fink, the chief executive officer of BlackRock, the world’s largest financial asset manager, published an open letter stating that climate change is now a defining factor in companies’ long-term prospects, and is the top issue raised by his company’s clients.
With the explosion of ecommerce over the past decade, consumers have gotten used to fast and free delivery. Next-day delivery is now the gold standard, and same-day delivery is often possible, Coyote noted. However, consumer buy-in cemented by sustainability efforts has been clearly shown,
with 61% of consumers citing their willingness to wait longer for the delivery of their purchases if they know it is better for the environment. Nonetheless, same-day and next-day delivery options are still commonplace.
Coyote said companies must make better supply chain decisions and convey their impact to consumer.
“The study’s data clearly outlined this juxtaposition between consumers’ desire for quick deliveries and sustainable shipping practices. Delivering on both requires a holistic, collaborative effort from all members of the supply chain,” Sinkovitz pointed out.
Coyote’s study found that the trend towards supply chain sustainability is dominant among companies of all sizes and across different verticals. Without a commitment to supply chain sustainability, companies will not be able to compete in the years to come,” it declared
“We are assessing existing business-critical suppliers and service providers and removing those who don’t meet our sustainability standards,” the vice president of supply chain at a consumer goods company told the researchers.
The executives surveyed stressed that they were overwhelmingly inclined to purchase products or services from brands that operate in ways that are more favorable to the environment, including how they manage their supply chains. In fact. 84% of respondents were more likely to base a purchase decision on a brand’s sustainability practices.
The director of supply chain at a retail company said, “We strive for extensive collaboration with key players across our supply chain, including manufacturing, retailers, transportation and warehousing. We set scientific targets and track goal progress.”
Also, 77% of companies with revenues between $1 million and $199 million say they increased their focus on sustainability in the past three years. Other
research shows that 71% of small- and medium-sized businesses have taken (or are starting to take) steps towards sustainability.
“This reinforces the importance of green practices for consumers and the acknowledgment of this trend among shippers,” Coyote says. “This common commitment reinforces that, regardless of company size or industry, sustainability is here to stay.”
“As organizations look to implement change in their own networks, they need the collective support of all business areas, often with supply chain at the forefront of these initiatives.”
For example, a manager of supply chain at a paper and packaging company in the United States, stated, “We set long-term goals, as that appears to be the way of the industry. Right now, we are planning about five years out.”
The manager of logistics at an industrial goods shipper explained, “We have both short-term and long-term goals.” The short-term goals are around small improvements, such as measuring drivers’ idle time. The long-term goals include overall fuel choices for fleets, including switching completely to alternative fuels in a matter of years.”
Global shippers are actively measuring fuel efficiency (69% of respondents); CO2 emissions (60%); alternative fuel use (52%); personnel skills related to sustainability (48%); and fleet age (46%).
Although 98% of shippers have at least some kind of sustainability program, only 71% have measurable goals, the poll found. Coyote said the takeaway is that “to be successful, supply chain leaders should develop clearly defined short and long-term goals, have a way to measure them and critically evaluate their effectiveness.”