In light of the increasing necessity to live and act responsibly, companies face the challenge of adapting to the demands of their customers and business partners, as well as legislative requirements. This blog post will examine the importance of sustainability for companies in the supply chain in greater detail. It will show how sustainability can help you define business models that are successful and sustainable in the long term, thus protecting the environment.
Sustainability includes ecological, social, and business aspects
These three aspects are closely interrelated and mutually influence one another:
- The ecological aspect of sustainability involves protecting the environment, promoting the use of renewable energy sources, and reducing the resource consumption and the ecological footprints of enterprises.
- The social aspects of sustainability involve the social needs and well-being of people and communities. These include fair working conditions, upholding human rights, and supporting diversity and inclusion. It is about guaranteeing fair working conditions and respecting human rights, while maintaining a company’s business performance at the same time.
- The business aspect of sustainability refers to the financial capacity of companies and their contribution to economic development. It is about developing long-term business models that enable sustainable returns while also taking social and ecological aspects into account.
Companies that act sustainably take all three of these aspects into consideration and try to strike a balance between them. When doing so, companies should pay attention to the impacts of their business activities on the environment, their employees, and society as a whole.
The responsibility of companies in the supply chain
Climate change is currently playing a major role. It is not a theoretical problem that only scientists are concerned about; it is a central, key topic of the 21st century. Increasing temperatures not only have negative effects on the environment, flora, and fauna, but also on human health.
Floods can damage transport infrastructure, for example, and thus the flow of traffic. In coming years, experts expect that extreme weather events will increase in frequency. This is why the Paris Agreement strives to stop global warming and keep it far below 2°C. Since greenhouse gas (GHG) emissions are the main driver of global warming, the Agreement also aims to achieve net zero greenhouse gas emissions.
Companies in the supply chain bear major responsibility regarding sustainability, because they have a significant impact on the environment and they use resources. With a share of 36.1 percent, the energy sector was the largest emitter of greenhouse gases in Germany in 2021. The transport sector accounted for 18.9 percent of total emissions, followed by manufacturing with a share of 17.8 percent. Road transport alone makes a significant contribution to global warming and affects the client. In Germany, road freight transport emits around 50 megatons of CO2 annually. Heavy trucks with loads weighing more than 26 tons are primarily responsible (study by the Fraunhofer Institute for Systems and Innovation Research ISI from 2020).
Implementation of the targets of the Paris Agreement will have significant impacts along the entire supply chain. Companies have to modify their products and processes to do their part in reducing greenhouse gas (GHG) emissions and optimize their supply chains. This makes sustainability especially important in the supply chain, because the transport and production of goods have a considerable impact on the environment.
How can companies in the supply chain make a contribution toward sustainability?
The three strategies – sufficiency, efficiency, and consistency – aim to make the consumption and usage of resources more sustainable.
An intelligent mix of sufficiency, efficiency, and consistency can help companies to achieve sustainability targets and promote sustainable development. While sufficiency primarily involves limitations and sacrifice, efficiency and consistency makes it possible to develop and use alternative, more sustainable products and technologies.
Conclusion
Summing up, sustainability is a decisive factor for the success and longevity of companies in the supply chain. Companies that prioritize sustainability and try to strike a balance between ecological, social, and business aspects will be better equipped in the long term, while at the same time making a contribution toward protecting the environment and creating a better future.
