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.

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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.