Sustainability Goals and Supply Chain Opportunity

Decarbonization as a necessary component of the COVID recovery has been widely discussed, with most major US trading partners, including the UK, EU, South Korea, and Japan, committing to net-zero emissions by 2050.  Beyond the national level, some 2,500 subnational actors – including Maine – have also expressed their desire to reach net zero in the next 30 years.

In addition, major global corporations like IKEA, Daimler, and Siemens – companies with sprawling, worldwide supply chains and sales channels – are setting their own sustainability targets and looking at supplier relationships as a place to make additional gains.  In many cases, this reflects a recognition that the true carbon cost of their end products is found in the upstream supply chain, which includes many small and medium sized businesses.

In total, just eight industrial supply chains account for 50% of emissions:  food, construction, fashion, “fast-moving” consumer goods, electronics, professional services, and freight.  Companies selling into those chains, particularly with a multinational corporation as the ultimate end user, will likely be expected to set, or follow, sustainability goals in order to remain as eligible suppliers or vendors. 

A recent report, Net-Zero Challenge: The Supply Chain Opportunity, published by the World Economic Forum in collaboration with the Boston Consulting Group lays out the current state of corporate-led, net-zero initiatives and provides insight into how those corporations might push sustainability goals down into the supply chain.

Additional Resources:

A More Sustainable Supply Chain
Your Supply Chain Needs a Sustainability Strategy
MIT Sustainable Supply Chains

Thanks to our partners at OCO Global for their contribution to this article.