Proxima’s Investing in A Sustainable Supply Chain report assesses supply chain sustainability through the lens of the investment manager.
The report looks at the role played by supply chain sustainability in investment decisions, how businesses can respond to investor scrutiny and what the future holds for businesses who take action and those who lag behind.
The headline findings of the report were:
- 85% of investment managers believe that businesses who do not implement supply chain sustainability initiatives will see share prices fall
- 84% also state that issues with supply chain sustainability and ESG standards are a risk to their investments
- 89% are discussing ESG (Environmental, Social, and Governance) standards in the supply chain with the companies they invest in
- 88% believe that supply chain sustainability standards will be a key criterion for investment decisions over the next ten years
- 80% believe that businesses without supply chain sustainability and wider ESG standards will struggle to access capital in the next ten years
Sustainability is not a new concept for business, but it is evolving, and companies must look at their entire supply chain to ensure that it is meeting ESG standards.
What is supply chain sustainability?
Simply put, supply chain sustainability is about minimizing the negative impacts your supply chain may have on the environment and wider society. Often more than 80% of an organization’s sustainability impact is found in its supply chain. Today, business leaders are being challenged to look beyond just their own organization and take responsibility for the impact of their full end to end supply chain.
Achieving a sustainable supply chain requires harnessing the power of suppliers and innovating to solve problems and create opportunities.
Why is sustainable supply chain management important?
Achieving a sustainable supply chain is not only good for society and our planet, it is also increasingly key to future business success as it has a knock-on effect on the ability to raise capital, comply with regulation and maintain appeal among customers.
The Investing in a Sustainable Supply Chain report demonstrates that a shift is taking place in the mind of investors. 97% of US & UK investment managers confirm that they now consider the sustainability standards of a business’ supply chain when making investment decisions.
Just as inaction prevents a revenue risk, ESG also offers a huge opportunity for businesses – the CDP also reports a $2.1 trillion opportunity from getting it right. There is widespread awareness of the threats and opportunities, and a lot of good work is starting to be done by businesses in creating more sustainable supply chains.
How to improve supply chain sustainability
The external nature of sustainability issues across the supply chain means that they a complex to both measure and control. However, there are steps that businesses can take in the short and long term to begin taking custody and driving down their Scope 3 emissions, as well as meeting other ESG standards. This includes:
- Implement robust measurement and reporting: Businesses have a chance to get ahead of rapidly developing legislation and use it to their corporate advantage. Reporting can allow businesses to identify the climate-maturity of key elements of the supply chain, optimise costs as well as identify risks and opportunities.
- Set supply chain renewable energy targets and strategy: Many businesses have touted their net zero targets and renewable energy strategy, but rarely do these targets extend to Scope 3 and suppliers. Businesses should engage with their suppliers and encourage a holistic transition to renewable energy sources.
- Actively engage with suppliers: Supply chain offers a huge amount of untapped potential for positive change. Through collaboration and open conversation, businesses can work together to ensure they are all pulling in the same direction and driving down emissions.
How Proxima can help
Proxima delivers sustainable procurement solutions for a range of clients and sustainability has become an increasingly in-demand service. Proxima brings together an experienced team with a diverse skillset to offer clients a fully end-to-end service to help accelerate businesses to meet their goals faster.
Please fill in the form to access your copy or get in touch to discuss how you can deliver sustainable procurement for your business.