Date: Monday, July 26th, 2021
Capacity constraints, increased demand for home deliveries and safety concerns during the COVID-19 pandemic led experts to believe that sustainability efforts would fall by the wayside.
But that doesn’t seem to be the case, according to the “2021 State of Supply Chain Sustainability” report released Wednesday by the MIT Center for Transportation & Logistics (MIT CTL) and the Council of Supply Chain Management Professionals (CSCMP).
More than 2,400 supply chain professionals were surveyed in late 2020, and 80% of respondents said that their companies’ commitment to supply chain sustainability (SCS) had increased or stayed the same since 2019.
“Some executives said that the pandemic had a limited impact on SCS and may have propelled or ‘accelerated’ their sustainability efforts,” the report said.
Social investments grow — what about direct climate action?
Human rights concerns in China and racial unrest in the U.S. boosted the industry’s efforts to increase worker welfare, safety, and diversity and inclusion.
Survey respondents were asked, “To what extent is each of the following issue areas a focus of your firm’s investment in SCS?” Human rights protection and supplier diversity, equity and inclusion increased the most — by 10% each year-over-year.
Climate mitigation, on the other hand, scored 6% lower than it did in 2019, even as energy savings and renewable energy scored 6% higher.
“A key question is the degree to which companies’ recent net-zero commitments will translate into SCS initiatives over the next five years. This is especially pertinent in light of our finding that climate change mitigation was a lower priority for firms in 2020,” the report concluded.
Company size and financial support
While sustainability goals are growing in general, MIT CTL and CSCMP observed that “the tangible investments companies make in supply chain sustainability do not always match their ambitions.”
The report found that large (1,000–10,000 employees) and very large (10,000-plus) companies were more likely to make and act on sustainability goals than smaller businesses. A larger portion of small and medium companies reportedly scaled back sustainability efforts due to the pandemic.
Small and medium-size companies also invested fewer human and financial resources for sustainability initiatives than their larger counterparts. This is partially due to the increased stress that smaller companies experienced while trying to stay in business during the pandemic.
Even though “the connection between companies’ track records in sustainability and their ability to win market share and turn a profit is likely to strengthen,” the report said, “our research shows that while there have been bold commitments in the public sphere, there has been limited change in companies’ willingness to invest in SCS programs.”
Despite the slower-moving smaller businesses and limited financial support and climate mitigation initiatives, many industry experts believe that sustainability is a supply chain trend that is here to stay.
“We’ve reached somewhat of a tipping point with sustainability amplifying the momentum that [it’s] not going to stop. We see the increased requirements from customers, from employees, from governments to act sustainably. This focus had really taken hold, and then COVID accelerated it,” Kyra Whitten, vice president of corporate marketing, communications and sustainability for electronics manufacturer Flex, said in the report.