3 Factors Impacting Environmental Sustainability in Supply Chains

Environmental sustainability in supply chains has become a critical concern for businesses across industries. Every company is working toward more environmentally conscious supply chain operations, recognizing the urgent need to mitigate their environmental impact.

However, the journey to supply chain sustainability is a complex and challenging endeavor, particularly in the intricate and interconnected world of supply chains.

Leaders in this space recognize the epic, uphill battle they've begun. The heavy lift exists because the supply chain is not just a handful of procedures or processes; it is an immensely complex network of interconnected components, and all players have to agree to the terms of a greener game.

There are three major factors impacting supply chain sustainability goals today. Let's cover them.

Trax is passionate about environmental sustainability. Nothing less than the future is at stake. Our latest innovation introduced a Carbon Emissions Tracker for the transportation industry: click here to learn more.

1. New Energy Solutions

New energy solutions are on the horizon, paving the way for sustainable supply chain management:

• According to the 2021 New Energy Outlook edition from Bloomberg Finance, zero-emission energy sources are predicted to be at 60% of installed capacity by the year 2040.

• Despite supply chain bottlenecks and high costs, renewable energy is on track to break global records this year with the addition of 295 gigawatts of new renewable power capacity.

• In 2015, 154 companies in the United States signed the American Business Act Climate Pledge. As of March 2022, that number had risen to over 300 businesses committed to pursuing ambitious carbon-reduction activities across supply chains.

The takeaway is this: ongoing efforts are being made to implement realistic, effective solutions for energy consumption in supply chain operations, and business leaders in our space have more opportunities than ever to leverage these efforts to support continuous improvement in supply chain sustainability efforts.

2. Consumer Demands and Expectations

A catalyzing factor driving the policy-level changes around supply chain emissions is consumers. More than ever, public sentiment has shifted to favor green companies:

• 66% of individuals surveyed by the World Economic Forum said they consider sustainability before making a purchase.

• Online searches for sustainable goods have risen 71% in the past five years.

• 23% of consumers have stopped buying from a brand that lacked efforts toward sustainability.

• 85% of consumers worldwide became "greener" in their purchasing behavior between 2020-2021, and more than 33% of consumers worldwide will pay more to buy from companies that observe sustainable practices.

• 66% of consumers say they are changing consumption habits to lower their environmental impacts, no longer seeing sustainable products as an alternative but an essential.

The evaluation of "sustainability," even to an average consumer, is informed by performance through the entire value chain of a product.

This includes production, shipping materials, shipping method, delivery method, and more. Part of not just making promises but making good on those promises comes down to visibility and performance metrics.

Do leaders in supply chains fully understand workflows, cycles, supplier agreements, delivery processes/timelines, and more? This level of understanding is only gained through meaningful freight audit and payment processes, which are supported by freight audit technology.

Efforts toward transportation spend management maturity will have the happy byproduct of improving line of sight into carbon use and uncovering areas that need improvement in sustainable supply chains.

3. The Challenge of Change Management

A final factor impacting supply. chain sustainability efforts is the challenge of change management.

New tools are available that will help supply chain leaders track carbon emissions, which is the first step to change. But the interconnectedness of supply chains means that many parties have to be on board: company leadership, company employees, suppliers, vendors, the list goes on.

Getting everyone, external and internal, on board with new supply chain sustainability initiatives requires skilled leadership.

Behavioral analysts have studied consumer behavior around sustainability for many years. Those findings, as well as insights from companies in an advanced stage of sustainability, provide valuable guidance.

Here are some valuable recommendations:

• Cast the vision: "Why is it a priority to be environmentally sustainable in supply chains?" There is plenty of existing information — including market and consumer demand — you can offer to support your big vision and mission.

• Use technology: Build automations, make data gathering easy, and make all points visible. Technology will alleviate the overwhelm from a shift this size in supply chain management.

• Answer "what's in it for me?": Leadership, staff, suppliers, and anyone else in your ecosystem need to see the real and relevant benefits of environmentally sustainable practices in supply chains.

• Outline the investments: It is unwise to mask the probably costly and time-intensive efforts it will take to reach an elite level of "green operations" in supply chains. Map it out with meticulous detail and be transparent about the costs.

• Create a timeline: Every company that has published a sustainability pledge or plan has it attached to a timeline, which is vital for authenticity and accountability in sustainable supply chain management.

At Trax, we've been working on supporting environmental sustainability efforts for a while now. Here's a great article to get your started: CO2 in the Supply Chain: New Tactics to Support Environmental Sustainability.

Trax Tools for a Sustainable Supply Chain

Implementing more streamlined practices to support sustainability efforts is just good business. It's also the right thing to do, and fresh technological solutions make it easier than ever.

Regardless of the challenges ahead to get to an elite level of environmental sustainability in supply chain operations, we all start from the same line: tracking.

That's why Trax's first purpose-built tool for this area is a Carbon Emissions Manager.

By leveraging industry-leading cloud-based technology solutions and global services, Trax empowers businesses to better manage and control their transportation costs, improve data quality, and optimize logistics management strategies – all while minimizing their environmental impact and supporting sustainable supply chains.

If you're ready to join other global, enterprise organizations in leveraging technology to accelerate progress toward environmental sustainability in supply chains, connect with Trax anytime to get started on building a more sustainable supply chain.