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ASCM Insights

Supply Chain Sustainability Every Day

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ASCM is strongly committed to sustainability and the mission to combat climate change every day of the year. But this Earth Day, April 22, is a time to revisit these principles and reinforce the many ways that our field can set the bar for prioritizing responsible business practices, which inevitably lead to a true business advantage.

Let’s get the bad news out of the way: After hinting about a new proposal that includes mandatory disclosure of climate-change risks and emissions, businesses across the United  States are divided on almost all of the rules, reports The Wall Street Journal: “Areas of contention include compliance costs, verification of emissions disclosures, and the proposed requirement for certain companies to report greenhouse-gas emissions from their suppliers and customers.”

One common issue is about the disclosure of Scope 3 emissions, which are produced by suppliers and customers when using a company’s products. Some organization leaders have complained to reporters that this kind of disclosure is difficult to obtain and won’t add investor value. But here at ASCM, we know that understanding downstream suppliers is exactly the kind of forward-thinking accountability our industry needs. As supply chain professionals, we have the opportunity — and the responsibility — to lead the way.

Now the good news: As reported by GreenBiz, management consultant Bain & Co., in collaboration with sustainability ratings provider EcoVadis, released findings this week showing that “strong environmental, social and governance (ESG) performance is a sign of a strong business.” In fact, the research illustrates that the financial value of supply chain sustainability initiatives “had margins 3 percentage points above those that don’t focus on their suppliers’ ethics, environmental and labor practices.” Further, an article in Supply Chain Digital revealed that ESG-compliant companies have higher employee satisfaction.

Lego Group is one company that continues to demonstrate these principles. Last year, I wrote about the company’s commitment to reduce its carbon emissions by 37% by 2032, in line with the Paris Agreement. At the time, company executives said 90% of its emissions came from its supply chain, including raw materials and distribution.

Just this week, Lego Group began construction on its first U.S. factory in Virginia, opening in 2025. The plant will support about 2,000 jobs, be carbon neutral, and have solar power to match 100% of the facility’s day-to-day energy needs. It will also have energy-efficient production equipment and zero waste to landfills. The factory supports the company’s goal to build resilience by shortening its supply chain — another emissions-cutting measure.

Supporting supply chain professionals who support the planet

For more businesses proving their sustainability commitment, look no further than ASCM’s Making an Impact award, which recognizes an initiative that creates a better world through supply chain. Past winners include Intel, La-Z-Boy, Microsoft and Zebra Technologies Corporation. Learn more about the ASCM Awards of Excellence and its six corporate and individual categories, then enter this year’s program by May 15!

Next, make a plan to attend ASCM CONNECT 2023: Europe in Brussels, where you’ll engage in educational sessions, trending supply chain topics, and networking opportunities. The general session will feature a representative of the Global Reporting Initiative, an international independent standards organization that helps businesses understand and communicate their impacts on climate change, human rights and corruption.

Finally, check out ASCM’s solutions to help you create sustainable supply chains, including our Enterprise Standards for Sustainability, which empower organizations to reach goals, improve results and be more competitive in today’s global business world. Plus, our upcoming workshop, Building a Sustainable Supply Chain: Best Practices and Solutions, will equip you with tools to design and manage your supply chain under the triple-bottom line, delivering profit and excellence while safeguarding society and the planet.

About the Author

Abe Eshkenazi, CSCP, CPA, CAE CEO, ASCM

Abe Eshkenazi is chief executive officer of the Association for Supply Chain Management (ASCM), the largest organization for supply chain and the global pacesetter of organizational transformation, talent development and supply chain innovation. During his tenure, ASCM has significantly expanded its services to corporations, individuals and communities. Its revenue has more than doubled, and the association successfully completed three mergers in response to both heightened industry awareness and the vast and ongoing global impact driven by supply chains. Previously, Eshkenazi was the managing director of the Operations Consulting Group of American Express Tax and Business Services. He may be contacted through ascm.org.

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