Responding to Climate Change
Gartner for Supply Chain
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By: Wade McDaniel , Distinguished VP Advisor, and Suzanne Petrusic, PhD , Director, Research and KI Leader
Desmond Tutu, the Nobel laureate, said, “There is only one way to eat an elephant: a bite at a time.”
Responding to climate change is daunting. There are so many moving pieces, it seems that it can be impossible to pick the most impactful place to start. Of the Global Fortune 500 companies, 63% have set 2050 emissions targets, but many companies have yet to take a bite.
A?survey?conducted by Ipsos in mid-2022 for the World Economic Forum found that across 34 countries, 71% expect that climate change will have a severe effect in their area over the next 10 years. Of that same group, 35% said they could be displaced from their home at some point in the next 25 years. The IPCC’s AR6 synthesis report states that things are getting worse faster than previously thought.
More gloom to be sure, but how should supply chain leaders navigate these impending impacts?
Challenges to Sustainability
We talk with a lot of chief supply chain officers and most of our clients seem to be genuinely concerned about sustainability for its simple goodness, if not for the urgency of the impact that climate change will have on them and their families personally. This is not even to mention the professional impact sustainability will have on them as their organizations make commitments to climate goals that many supply chain professionals believe are simply out of reach.
And let us be clear: Immediate action on sustainability is beyond urgent. Organizations must reduce emissions and transition to a sustainable supply chain design.
Should supply chain do more? Yes.
Can it? Yes.
Do its leaders want to? Yes.
But there seems to be a lack of progress lately. Companies are considering revising their 2030-35 commitments. Many times, this loss of momentum has been laid at the feet of supply chain. Some say this is due to motivation or mindset. Instead, we think it’s about the very real barriers that every supply chain leader faces in navigating an extremely difficult problem as an individual in a very complex stakeholder environment.
Results from Gartner’s 2022 CEO business priorities survey highlight the real challenges supply chain leaders face in their organizations where sustainability is ranked eighth overall. They are by no means powerless and are in a privileged position to enact change. But they are not magicians.
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We’re not talking about the problem of operationalizing emissions reductions, achieving sustainable energy or transitioning to a circular design. These are big problems to solve, but they?aren’t?the hardest nuts to crack in this milieu.
Foundational Steps
Rather, supply chain leaders of 2023 must confront even more profound obstacles to their transformation: Embedding their sustainability strategy into their overall supply chain strategy and finding partners and funding for sustainability initiatives. These are the foundational steps supply chain leaders must take to be successful at operationalizing transformation.
When building out their strategies these questions need to be answered:
Solving for these obstacles help supply chain leaders take bigger bites of the elephant. Then they can accelerate supply chain’s achievement in other difficult, but often discrete, initiatives toward transformation.
We’ve learned that companies can’t go it alone. They need to collaborate with suppliers, peers, partners and customers to make real headway. Ecosystems are forming where those that have made progress are sharing and assisting those that are struggling. Supply chain leaders will need to be open to opportunities for both give and take, a bigger bite at a time.
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This newsletter provides an opportunity for Gartner analysts to test ideas and move research forward. Some comments or opinions expressed hereunder are those of individual analysts and do not always represent the views of Gartner, Inc. or its management.