Top supply chain executives view sustainability as a business priority, and are planning initiatives to incorporate sustainable business practices, even as they work to overhaul and improve the resiliency of corporate supply chains to overcome the major disruptions over the past two years, according to a new study released by the IBM Institute for Business Value (IBV).
For the report, IBM, in collaboration with execution management technology company Celonis, and global forecasting, quantitative analysis, and thought leadership Oxford Economics, surveyed 500 Chief Supply Chain Officers (CSCOs) across a broad range of industries, from companies with revenues spanning $500 million to $500 billion.
The survey found that two thirds of CSCOs identify sustainability as a core element of business value. The executives reported that they are facing intensifying pressure for sustainability progress from a range of stakeholders, including their boards of directors, cited by 70% of respondents, customers (66%), investors (66%) and regulators (65%). In response to these pressures, IBM said that another recent study indicated that 78% of CSCOs are incorporating environmentally sustainable business practices into their demand and supply chain planning functional activities, and 72% have sustainability initiatives incorporated into procurement and sourcing functional activities.
According to the study, over half of the CSCOs surveyed would be willing to sacrifice profit to improve sustainability outcomes. When asked to identify the benefits expected from sustainability initiatives, the CSCOs cited compliance with environmental regulation, reductions in reputational risk and driving new innovation areas as the top three, followed by additional benefits including reducing product lifecycle waste, creating strategic brand differentiation, and attracting talent due to sustainability reputation.
The CSCOs a series of specific actions they are taking to improve sustainability, including improving energy efficiency (50%), incorporating circular design practices, and using more recyclable materials. Specific circular economy initiatives planned over the next 3 years include initiating full lifecycle design of their materials and products to expand re-use of materials and reduce waste, and improving the energy efficiency of their products and services.
35% of respondents said that they planned to develop new products and services based on renewable energy componentry, and 30% expect to engineer new zero-waste products and services.
Investing in ESG data and disclosure capabilities also appears high on the CSCO priority list, with 55% reporting that they plan to incorporate real-time monitoring and reporting on environmental and social sustainability over the next three years.
Click here to access the study.