Consumers across all generations are actively changing their shopping behavior to be more sustainable: 80% are willing to pay more for sustainably produced or sourced goods, and 46% are already shifting their purchase habits toward sustainable options.
(Source: PwC)
Consumers aren’t the only ones putting pressure on companies since regulations play an essential role. With over 2,400 ESG regulations worldwide, it is now clear that sustainability reporting is a vital part of corporate compliance, and companies need to take action.
To tackle the problem of enterprises’ impact on the environment, we must start by identifying the leading cause. And the data is precise: according to McKinsey, 90% of businesses’ environmental impact comes from supply chains. Companies must start working toward a green supply chain to reduce their impact.
Is it possible to improve sustainability in the supply chain?
Consumers and regulations call for companies to reduce their environmental impact significantly, but the complexity of this challenge is enormous.
For example, let’s consider the Paris Agreement: to achieve a Carbon Footprint reduction in line with the agreement’s target, companies would need to decrease their carbon intensity by more than 90% on average by 2050.
Such a goal seems impossible, but this is not the time to surrender: businesses can count on the support of new technologies to optimize their processes for social and environmental sustainability.
Leveraging Supply Chain Control Tower Solutions to Go Green
New technologies offer unprecedented and powerful possibilities to optimize, streamline, and improve processes. Among all these, supply chain control tower solutions are emerging as the silver bullet to revolutionize supply chain management and bring companies’ sustainability efforts to the next level.
The lack of data is at the heart of all difficulties in achieving sustainability goals. Lack of data hinders all efforts a company can make for three main reasons:
1. Without complete visibility, executives can’t accurately measure their impact, especially when it comes to scope 3 emissions;
2. Lack of visibility means not being able to identify vulnerabilities and opportunities for improvement across the chain, leaving executives gambling on where to focus their efforts;
3. Without the necessary data to perform advanced simulations, companies risk implementing strategies that produce sub-optimal results at best.
Supply chain control tower solutions provide the necessary end-to-end visibility to overcome these challenges and strengthen efforts toward ESG goals. By exploiting the power of sustainability analytics, they can give strategic insights to support your company in achieving its goals.
Supply Chain Control Tower Solutions for Waste Minimization
Supply chain waste is widespread, leading to environmental concerns, increased costs, and reduced profitability. Executives are now under more pressure than ever to cut down on waste, but despite all efforts, many are falling behind.
To help a leading FMCG company tackle this issue, Tredence leveraged the power of control towers for intelligent inventory management. The main problem was the lack of visibility on inventory levels, leading to high annual wastage.
Thanks to the implementation of a personalized supply chain control tower solution, the company was able to significantly increase visibility, monitor stocks, and proactively manage its inventory, leading to:
- A 7MM pound reduction in food waste annually
- A 30% reduction in planning efforts thanks to automatization
- An up to 20% reduction of excess inventory.
Engaging Suppliers to Work Together
Achieving ESG goals is a collaborative effort. As your company commits to reducing its carbon footprint, so should your suppliers. So, when analyzing your internal processes, don’t forget to consider your suppliers’ impact.
By using control towers, businesses can assess and score their suppliers based on their sustainability practices; this boosts communication and facilitates cooperation between all stakeholders to create a green supply chain.
But what to do when the ESG analytics clearly show that your suppliers aren’t doing enough? Supply chain control tower solutions facilitate your scouting efforts by analyzing and rating all potential suppliers, helping you find partners better suited to support you in your sustainability journey.
What can Sustainability Analytics do for ESG Goals?
The short answer is a lot. By using advanced sustainability analytics, companies can develop sustainable models powered by data-driven insights that can be used to assess their ESG performance.
ESG analytics give you a clear view of some crucial aspects of your supply chain:
- Recyclability
- Waste reduction
- Water consumption
- Carbon emissions
- Overall supply chain performance
The data is then used to identify areas for improvement, prioritize them, and develop a data-driven sustainability strategy.
When it comes to sustainable business plans, there is no one-size-fits-all. Each company has unique challenges, characteristics, and possibilities that will influence its green initiatives. However, what matters is that they find their solution to achieve ESG goals as soon as possible.
