Industries and individual companies are under growing pressure to define their commitment to sustainable supply chains. Yet the meaning of that term remains cloudy. A working definition should include efforts at both environmental protection and adherence to workers’ rights.
The latest research by CSCMP and MIT tapped the views of supply-chain professionals as well as corporate executives outside that discipline, but with some form of supply-chain sustainability program underway. Researchers also studied news reports on corporate responsibility, to gauge progress toward that end on an annual basis.
They concluded that pressure for achieving supply-chain sustainability comes from multiple sources, including customers, non-governmental organizations, the media, regulatory agencies and their own executives. What surprised them was that no single source exceeded the others in influence. But companies differed in their responses to those influences. Child labor, forced labor and other social concerns ranked high on the list, as being of “critical importance.” By contrast, environmental efforts were secondary, considered as “nice to have.”
Still, the overriding concern displayed by companies was high, addressing many key business issues. Much of the effort was driven by the realization that social compliance and sustainability were “critical to brand equity.” As CSCMP vice president Chris Adderton notes: “You don’t want to be the outlier that finds out too late that something is wrong in your system.” Alexis Bateman, director of MIT Sustainable Supply Chains, adds that the research can serve as a valuable guide to future efforts by companies looking to achieve true supply-chain sustainability.
