Supply Chain Sustainability Takes Root

Whether the motive is saving the environment or saving money, companies are embracing supply chain sustainability from the ground up.

Sustainability is rising. Born out of global concern over climate change, on April 22, 2016, a record 175 countries signed the Paris climate agreement, voluntarily pledging to cut greenhouse gas emissions.

Businesses are paying attention. A 2014 McKinsey & Company survey asked respondents about the actions their companies are taking to address environmental issues, and practices they use to manage sustainability. CEOs were twice as likely as they were two years before to see sustainability as a top priority, according to survey results. Their stated motivation in 2014 was aligning sustainability with the organization’s goals; two years prior, cost cutting was the primary motivation.

When it comes to green and sustainable supply chains, though, cost cutting is still the driving force.

“Sustainability is not always to help the environment,” says Patrick Penfield, professor of practice, supply chain management, at Syracuse University’s Martin J. Whitman School of Management in Syracuse, N.Y. “Every dollar saved through supply chain sustainability efforts is a dollar for profitability.”

Whether companies are embracing lean, green, and sustainable supply chains to save money, protect the environment, or because customers and employees want them to, there is no question that technology makes it possible to implement changes large and small that have a positive environmental impact.

Green opportunities abound. From reducing energy consumption and carbon emissions to using less packaging and more environmentally friendly materials, businesses are making significant and often innovative changes that offer a win-win: reducing carbon footprints while often saving money.