Supply chain companies committed to sustainability

The state of supply chain sustainability is strong, despite the economic and pandemic-related challenges of the past year-and-a-half, according to a recent study from the MIT Center for Transportation and Logistics and the Council of Supply Chain Management Professionals (CSCMP).

The groups’ annual State of Supply Chain Sustainability 2021 report showed that most companies were undeterred in their efforts to create sustainable supply chains over the past year and that, for many, the Covid-19 crisis either accelerated their efforts or helped raise awareness of the importance of sustainable business practices.

“Last year, when the impact of the Covid-19 pandemic was still escalating, we expected the crisis to dampen companies’ enthusiasm for investing in supply chain sustainability (SCS),” according to the report authors. “Enterprises would surely divert all their attention to combating the pandemic. Remarkably, the survey results suggest that Covid-19 did not significantly slow the push to make supply chains more sustainable.”

More than 80% of survey respondents said the crisis had no impact or increased their firm’s commitments to SCS. What’s more, 83% of executives interviewed said that Covid‐19 has either accelerated SCS activity or, at the very least, increased awareness and brought urgency to this growing field.

The study also found that the momentum seems to come from large or very large companies—those with between 1,000 and 10,000 employees—with small and mid-sized companies reporting that they were more likely to pull back their sustainability efforts in the past year. More small and mid-sized companies said they were not engaged in such efforts before the pandemic and were even less so during the crisis “likely due to strained financial resources,” the authors said.

The report showed that companies’ overall commitment to social and environmental issues was similar between 2019 and 2020, but that interest in some areas grew markedly: human rights protection, worker welfare and safety, and energy savings/renewable energy were key growth areas, according to the study.

“The growing interest in social and labor issues is a continuation of a trend we saw in the first report,” the authors said. “In 2020, this finding is likely due to, in large part, the reprioritization of corporate goals during the pandemic.”

Other key findings include: pressure to support sustainability in supply chains is coming from multiple sources, including investors, government, and international bodies; executives are the most significant sources of pressure behind corporate commitments to supply chain sustainability across all issue areas; and that supplier development, supply chain visibility, and environmental impact reduction are the three most common ways companies are putting their SCS promises into practice.