Global Sustainability Forum: How to build a more sustainable supply chain
Scope 3 emissions are notoriously difficult to reduce, and the average supply chain is responsible for 90% of a consumer company’s environmental impact. The key to tackling these emissions is working with these supply chain stakeholders and having a clear focus on the particular factors each industry deals with, experts said at the event wealth‘s Global Sustainability Forum last week.
“You really have to work with these companies so they can set science-based goals,” said Suzanne DiBianca, co-founder and chief impact officer at Salesforce.
To this end, Salesforce hosted a supplier exhibition where 40% of their suppliers pledged to meet science-based targets by 2025. The aim is to increase this percentage of participation.
Susan Lorenz-Fisher, senior vice president of corporate responsibility and sustainability at AmerisourceBergen, said that while supplier incentives often help meet carbon targets, her company has been more successful with a collaborative model.
“The carrot and stick is always an effective route, but given the challenges we’ve seen — particularly in healthcare — it’s really been much more of a collaborative engagement model that has yet to mature,” she said. “But there’s a lot of … momentum from partner organizations that I think will have a positive impact in the short and long term.”
Of course, working together will not make the problem of these emissions any easier to tackle. Supply chains face disruption from a variety of factors, many of which are beyond our control.
“The world is facing great challenges,” said Pilar Cruz, chief sustainability officer at Cargill, which focuses on food transportation and operates in 70 countries. These challenges include the pandemic, extreme weather events (like Hurricane Ian in Florida), political divisions and war.
And the responsibility for making the supply chain sustainable in the face of these challenges lies with companies. Many believe that while consumers are increasingly investing in net-zero goals for the companies they support, they are not always able to pay more to buy those products.
“It’s important that the everyday, affordable choice becomes the sustainable choice,” said Kathleen McLaughlin, Walmart’s executive vice president and chief sustainability officer.
“On average, customers are increasingly aware of environmentally and socially relevant issues and are increasingly concerned about them. We see that in our data,” she added. “Nevertheless, there are some customers who are able and willing to pay more to contribute to all of the transitions we’ve talked about. And then there are many people who don’t want to or can’t do that. They’re just very concerned about supporting their families and keeping a roof over their heads.”
A challenge for companies like Walmart is the sheer volume and breadth of the products they offer. Everything from t-shirts to apples, as McLaughlin put it. One way Walmart has addressed this is with Project Gigaton, which aims to reduce Scope 3 emissions through partnerships with suppliers.
To make products more sustainable, companies must have the right technology to target pain points in the supply chain. One way to do this is through strategic partnerships.
“We really found that partnering with organizations that are helping to broaden and build more resilience in the healthcare supply chain was a really good area of partnership for us,” said Lorenz-Fisher.
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