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What is Supply Chain Sustainability? Why is it important?
Businesses are definitely putting sustainability higher on their priority lists and adopting more strategic approaches. Green-conscious consumers are seeking more information to assess the supply chain sustainability of the items they buy as a result of the shift in consumer preference for environmentally friendly products. The logistics of moving this product along its supply chain, as well as the raw materials used, the manufacturing and production processes, and so on.
Intelligent supplier management, or choosing suppliers based on criteria other than just price and delivery time, is giving companies a clear competitive advantage. Companies have also taken into account their downstream suppliers in addition to expanding the extent of their monitoring of the work environment and impact inside their own supply chain and their direct suppliers. In order to successfully implement supply chain sustainability policies that include the whole value chain of a company’s products, transparency is essential.
Logistics is a key factor in the expansion of enterprises in every sector of the economy since it facilitates international trade. It also leaves a non-sustainable carbon footprint, though. Up to 21% of the global carbon dioxide emissions in 2020 came from the logistics industry. Sustainable logistics is a requirement for businesses due to rising customer demand, pressure from authorities and investors, and new green supply chain rules.
Author Name: Tiffany Lee – Marketing Analyst at FreightAmigo
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What is the Future of Logistics Industry Prospects?
- The physical supply chain and the digital supply chain are the two parts of the supply chain sustainability.
- Up until cargo reaches its final location, cargo must be stored and moved through a variety of facilities and modes of transportation.
- Many of the innovations being investigated use automation, machine learning, and blockchain technology to make trading paperless.
- Digital solutions also assist more accurate reporting and help organizations maintain track of their sustainability indicators and impact measurements.
According to the 2022 State of Supply Chain Sustainability report, there has been a steady increase in pressure to support SCS since last year, and environmental aspects of SCS have attracted significantly more attention than in 2020: The two topics with the greatest increases in interest from the previous year were climate change mitigation and natural resource/biodiversity conservation.
The Key Challenges for Supply Chain Sustainability
- Not enough infrastructure in place to support green offerings on a worldwide scale, i.e., there aren’t enough facilities for green energy, vehicles, equipment, and so on at landing or transit hubs like ports and airports.
- Biofuels currently cost more than traditional fuels, thus using them in sustainable solutions can be pricey.
- The absence of a global industry standard for green supply chains is the last but not least of these issues.
How might digitization help a firm achieve its sustainability development goals?
- The advantages of digital breakthroughs and instruments for supply chain sustainability for enterprises are significant.
- Businesses must invest a specified amount in supply chain sustainability initiatives or improvements.
- In order to maximize company investment and ensure that their selected sustainability strategy has the most significant impact, businesses want an accurate study of their carbon footprint.
- An interactive supply chain sustainability tool from Maersk, the Emissions Dashboard, gives companies a comprehensive view of their carbon footprint across their whole value chain and trade routes.
- Whether it be Maersk or another party, it is a neutral single window that aggregates the emissions data from all carriers and modes of transportation.
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Read More:
ESG is the Trend! Adopt ESG in Logistics Industry
2023 EU Carbon Border Tax is likely to Hit Enterprises! How to Turn Crises into Opportunities?
Carbon Reduction Policies Bring Benefits for Industry Sectors
If you have any inquiries on Green Logistics Technology, feel free to contact FreightAmigo now:
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