Analyst Insight: Sustainability shouldn’t be isolated from business growth. Shippers, customers, carriers and investors can simultaneously reduce environmental impact while advancing their economic interests. 

A State of the Supply Chain Sustainability report released at the end of 2023 painted a less-than-stellar picture of the industry’s embrace of environmental practices. The report, sponsored by the MIT Center for Transportation & Logistics and the Council of Supply Chain Management Professionals (CSCMP), revealed that 65% of those surveyed said their firms did not currently have a net-zero carbon emissions goal. Furthermore, the report revealed that just 6% reported a year-over-year increase in organizational commitment to climate change mitigation.

Yet there’s more urgency than ever, as customers, suppliers and stakeholders increasingly expect the companies they work with and/or buy from to implement more environmental practices. A 2023 Gartner study on the future of the supply chain found that more than 50% of customers today will only do business with companies that practice environmental and social responsibility. In addition, European and U.S. regulators are stepping up measures to enhance and standardize climate-related disclosures for investors.

It’s a common fallacy that adopting environmental practices will lead to reduced profits. Bottom lines are more likely to be negatively impacted as public pressure grows for the supply chain industry to adopt sustainability programs and demonstrate progress. The MIT/CSCMP and Gartner studies point to a lagging supply chain industry charting a collision course with public sentiment. It’s time to think about sustainability and business growth in tandem.

Jump on the Technology Train

Sustainability and business growth can be achieved simultaneously, thanks to increased transparency and data visibility in the supply chain industry. New and emerging technologies are being enlisted to show real, measurable progress toward cutting carbon emissions. This includes artificial intelligence (AI), Internet of Things (IoT) enabled devices, alternative fuel vehicles (AFVs), telematics, electrification and predictive/prescriptive analytics.

These technologies have already eliminated billions of metric tons of emissions from logistics and supply chain operations in the last few years. In addition, enhanced transparency and data visibility, also delivered through emerging technology, have helped shippers take action and make decisions about which transportation best serves both their sustainability and their business goals.

As Forbes contributor Brian Cross stated in his November 2023 article, Is a Sustainable, Profitable Supply Chain Within Reach?, “Understanding precedes action. And to achieve the needed understanding the right data, visibility and analysis are critical.” This makes sense. It’s imperative to utilize the technology tools that calculate emissions and play out potential scenarios such as choosing a different transportation mode than simply over-the-road trucking. 

Another key to meeting sustainability goals and driving business growth is having more transport options. The most environmentally responsible way to transport products requires access to truck, rail, air and sea options. Building multimodal options into your supply chain operations can also help organizations run faster and smarter — two things that can grow the bottom line.

The Way Forward

The road to a truly sustainable industry is long, and we have a way to go, as evidenced by the MIT/CSCMP study. But the tools are at hand. By implementing sustainability programs, leveraging technology and collaborating with partners, organizations can significantly reduce their environmental impact while strengthening their bottom line. Let's embrace these advancements and work together to build a more sustainable future, one supply chain at a time.