Sustainable supply chain: customers are demanding it, but companies aren't ready

Sustainable supply chain: customers are demanding it, but companies aren't ready

Environment · ·

A survey has revealed that companies are now under greater pressure to demonstrate the sustainability of their supply chain.

The globalisation of the market has led private companies to purchase goods and services from a wide range of suppliers located in different parts of the world. Owing to consumers' growing attention to the impact of products, companies have had to adapt and improve the social and environmental sustainability of their supply chain. The effort invested does not always translate into genuine effectiveness, however, despite the fact that companies are coming under ever-greater pressure to demonstrate the sustainability of their supply chain. This is what emerged from an international study conducted by the certification body DNV GL with the support of the research institute GfK Eurisko and the non-profit organisation Sedex (Supplier Ethical Data Exchange).

Terminal container a Tilbury, Inghilterra
Pressure is coming from multiple directions, generated by various stakeholders who expect companies to proactively manage every tier of their supply chain, so as to contribute to the sustainability goals of the entire community © Daniel Berehulak/Getty Images

How customers influence companies

The main finding of the survey, which involved around 1,400 professionals across markets in Europe, Asia and the Americas from various sectors and of varying sizes, is the influence that consumers exert on the market. Indeed, 76 per cent of the companies involved stated that "the primary drivers influencing their management of sustainable supply chains are customers themselves", while nine out of ten professionals say that sustainability in the supply chain is given great weight in their purchasing decisions. Compared with the previous edition of the study, conducted in 2014, pressure on companies to demonstrate the sustainability of their supply chain also increased by 6 per cent.

The situation in Italy

In Italy too, as in the other countries involved in the study, awareness of the impact that supply chains have on workers and the environment is high. The research found that, for more than nine companies out of ten, sustainability is a factor taken into consideration in purchasing decisions, to a "very significant" degree for one in three companies.

Negozio di ortofrutta bio
Only 4% of the companies involved in the survey have taken action to improve sustainability across all tiers of their supply chain, while 9% have reached the majority of their first-tier suppliers — those from whom they purchase directly © Justin Sullivan/Getty Images

Companies' commitment to a sustainable supply chain

The pressure exerted by consumers is bearing the hoped-for results: 81 per cent of the companies surveyed have taken at least one action to improve sustainability along their supply chain. Despite these efforts, however, only 7 per cent of respondents have reached every tier of the supply chain, as the initiatives undertaken to reduce environmental and social impact are largely confined to first-tier suppliers. In Italy, around seven companies out of ten have taken at least one action to improve sustainability in their supply chain. Here too, however, the actions do not cover the entire supply chain. "The most common initiative consists of supplier audits, with 33 per cent of Italian companies stating they have carried one out in the past three years," the report reads, "followed by direct requests to suppliers for information and data (26 per cent) and the adoption and communication of a dedicated policy." Overall, the initiatives are characterised by limited scope and a self-managed, loosely structured approach.

Manager guarda fuori dalla finestra di una sala riunioni vuota
Actions to improve sustainability in the supply chain bring tangible benefits for companies, such as enhancing brand reputation © Ingimage

Sustainability cannot be improvised

"Sustainability in supply chains can no longer be regarded as a voluntary activity characterised by unstructured attempts," commented Luca Crisciotti, CEO of DNV GL. "The companies that have achieved positive outcomes are those that stand out for a more systematic approach. Managing these aspects strategically and with a holistic approach makes it possible to address risks more effectively and to seize the associated benefits, while at the same time meeting legislative requirements and the demands of stakeholders and the global market."