How technology is unlocking supply chain sustainability in the consumer sector

Jon Chambers, Executive Partner, Supply Chain Operations at IBM Consulting

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Pressure is mounting on retail and consumer goods companies to enhance transparency around their environmental credentials. As a result of growing scrutiny, supply chain sustainability is rapidly becoming a business-critical essential across the sector.

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A recent IBM study, Redesigning Brand Values , conducted in partnership with the Consumer Goods Forum (CGF), surveyed more than 1,800 industry executives across 23 countries. It found that 60% of respondents agreed that sustainability initiatives will fundamentally change their supply chain models. As a result, consumer goods companies are planning to boost technology budgets by 34% to align their operations with sustainability goals.

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I was recently joined by Daren Abney, Executive Director of the U.S. Cotton Trust Protocol , and Peter Jones, Head of Sustainability at Ikano Insight , to discuss how executives can integrate sustainability practices into their core operations. We also discussed the important role digital solutions can play in setting new standards of supply chain transparency and sustainability.

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I first asked Peter for an overview of the topic.

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“Supply chain sustainability is becoming more and more important because we live in a world with finite resources. The old linear model is no longer sustainable; we need to be able to see our supply and value chains from raw materials to the end of life of products and become more circular in our ways.

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“This helps us to become more resilient and more cost efficient, meaning that we actually have better environmental and social impacts, as well as a better business impact.”

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Consumers are demanding action, as are investors, and there's a lot of legislation coming down the line, too, he added.

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I then asked Daren what sorts of changes he’d witnessed in recent years.

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“I've been working in the textile sustainability space with retailers and brands and it’s changed dramatically. Now, businesses have really shifted to looking at their holistic supply chain, because they see it as a business imperative for raw material security for their future operation.

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“There are two key issues when it comes to sustainability and the supply chain. First, it’s a lack of verified data. And second, it’s transparency.”

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As already mentioned by Peter, regulations are driving change, so I asked him about the scale of the impact regulators are having.

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“You've got the Task Force on Climate-related Financial Disclosures, the Carbon Disclosure Project and the Global Reporting Initiative – lots of frameworks where you can voluntarily share your performance. But now it's becoming law. In the US you've got the SEC climate disclosure rules and the Corporate Sustainability Reporting Directive in the EU, which require a huge amount of data from across your value chain. And then you've got the International Sustainability Standards Board, putting global legislation on every company. It’s a massive challenge to provide all that data.”

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Companies now need total visibility across their entire value chain, which isn’t easy. So I asked Peter what role technology could play in helping ease the reporting and data collection burden.

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“I have to say that the biggest shift, and actually the biggest challenge, is tech. There's a lot of things happening at the moment. There's floods, there's fires, there's storms; supply chains are being interrupted. If you can monitor that in real time and see what's actually happening, you can start to divert your supply chain and keep it working.”

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Daren, agreed, adding that tech can also help businesses directly monitor their overall environmental effectiveness and help with compliance.

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“I think environmental impact data, which ultimately leads to scope three emission reporting, is of the utmost importance and it's part of why we got engaged in the climate smart commodities programme in the US. It's something that's funded by the United States Department of Agriculture and in essence it's enabling growers of different commodities to be able to switch to regenerative practices, while creating a path for carbon insetting.

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“I do have a worry that with this huge push for data, and all the new reporting requirements, that companies are going to get inundated. It really requires collaboration and visibility across the whole supply chain.”

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To hear more detailed insights from this LinkedIn Live discussion, click here .