Deploy Sustainable Supply Chain Playbook
Whether you are a sustainability guru seeking to realize more business performance successes or simply needing to satisfy a customer’s new green initiative data request, we all have more in common than we think. ?
To be clear, the motivating force(s) to reduce our company’s environmental impact very widely. Valid drivers from eye-opening scientific research to evolving consumer preferences to demanding customer requirements to changing government regulations are all macro trends shaping boardroom agendas. Regardless of the origin, leaders must now carefully consider sustainability as part of their decision criteria when forging their company’s strategy.
Strategizing sustainability is one thing- acting sustainable is quite another. True value creators empower their teams to convert company strategy into actionable sustainability projects that deliver business results.
Encouragingly, progress is being made with more than 33-percent, 702, of the world’s largest publicly traded companies now having net zero targets according to London, England based sustainability transparency and accountability non-profit collaborative Net Zero Tracker . However, the simple fact remains, few, if any, companies are truly sustainable. We all have work to do.
A “Sustainable Supply Chain Playbook” is an invaluable resource guide intended to help you and your suppliers take practical profitable next steps in advancing your company sustainability business performance results regardless of where you are at journey. ?
Run Targeted Supply Chain Plays
Large multinational food and beverage leaders like PepsiCo have mapped their baseline scope 1 and 2 emissions. The company has admirably publicly disclosed plans to reduce direct and indirect emissions by 75-percent by 2030 and pledged to be net-zero by 2040. PepsiCo’s Climate Action Strategy aligns with the United Nations Business Ambition for 1.5°C pledge using science-based targets (SBTs) in line with limiting global warming to 1.5°C above preindustrial levels. Most importantly, the company has made real progress off their 2015 baseline reducing emissions for scope 1 and 2 by 0.2 and 1.3 million metric tons (MMT) respectively.
As much positive progress as PepsiCo has made- it can only directly address 7-percent of the company’s total value chain emissions. Unfortunately, PepsiCo’s emissions progress to date is net nullified as the company’s scope 3 emissions, e.g., supply chain, increased emissions by 2 MMT during the same time period.
The outsized influence supply chain has on sustainability success is common across food and beverage (and most manufacturing sectors). Large multinationals from Keurig Dr Pepper to Molson Coors ’ scope 3 emissions, e.g., supply chains, make up north of 90-percent of their value chains total emissions. Naturally large multinationals are turning their leadership attention to encouraging supplier participation in their corporate sustainability programs. To amplify results, leaders are finetuning their plays by conducting materiality assessments to target efforts at their ~20-percent of suppliers that make up ~80-percent of their scope 3 emissions. In Pepsi-Co’s case, agriculture, packaging, and third-party transportation and distribution suppliers combine to account for 78-percent of total value chain emissions.
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Considering the immense impact supply chain has in achieving sustainability strategy goals, PepsiCo and others are instinctively adjusting plans to invest time where the highest returns can be realized. PepsiCo’s Sustainable Sourcing Program has focused largely on passive and reactive supplier assessments to date. Looking ahead, more and more companies are expected to focus their resources on building stronger partnerships with strategic suppliers. PepsiCo’s Sustainable Growth Strategy , pep+ “PepsiCo Positive,” aims to change how they source ingredients and make and sell products. The company’s early successes will need to be externalized, replicated, and scaled outside their four walls into the supply base if the company is to achieve their sustainability ambitions on time and budget.
Nurture Sustainable Ecosystem
Companies with large spends are and will more frequently use their sourcing power to influence strategic suppliers to commit, develop, and share actionable sustainability plans. Sustainable Supply Chain Playbooks are critical for transforming strategic plans into actionable plays.
Looking ahead, companies will need to provide their suppliers with attainable actionable plays that realize real emissions reductions and business performance. Business, environmental, and supply chain goals must be in lock step to truly be sustainable. Elevating supplier sustainability performance will not only allow you to meet your net zero company goals profitability but allow you to maintain improved business results over time.
If deployed effectively, Sustainable Supply Chain Playbooks enable buyer, suppliers, and the boarder ecosystem of stakeholders to each win by expanding the value pie together. Sustainable Supply Chain Playbooks not only position your suppliers to win but reposition your value chain as the ecosystem of choice for the most sustainable suppliers.
Receive Additional Resources
Whether you want to ignite your company’s sustainability journey or desire to improve a specific project outcome within your defined environmental, social, and governance (ESG) strategy, below are additional resources and content that will hopefully accelerate your efforts.??