The maddening thing about supply chain sustainability initiatives is that they can make financial sense initially. Then you dig deeper into the figures, and they don’t. Another, closer look, and maybe there’s a hidden yet measurable boost to the bottom line. 

The trouble with almost all attempts to measure, let alone mitigate, carbon footprint and other environmental metrics is it’s tough to make sure you’re including every consideration. And it’s the same with the financial impact of initiatives to boost sustainability. Unless you’re doing a genuinely end-to-and assessment of costs and savings, you may well be missing out on opportunities that will not only improve your “green” credentials, but will benefit the annual P&L sheet.

The trick, says Pierre Abou Hamad, partner at management consulting firm Citwell, is to get all the various parts of a company talking to one another so they can make sure the actions of one are not having unintended effects on another. Abou Hamad was speaking at the ProMat 2025 conference in Chicago March 19, presenting a session entitled: “Sustainable Supply Chain: Greenwashing or Real-Life Solutions? What Could be Really Achievable for a Profitable Business?”

Mismatched goals are rife even before you touch on sustainability and stick with pure financial end-results. The classic example is the procurement manager who jumps at a rock-bottom price on a must-have component part without taking into account that there will be sky-high freight charges because the supplier is on the other side of the world. The knock-on effects don’t stop there, either. If the parts have an extended delivery time, then there’s an increased need for safety stock. That means more capex tied up in inventory and extra warehousing costs. Further, maybe the country of origin has different regulations than another supplier, meaning quality assurance may be an issue, or you could incur extra product inspection costs. “A lot of these costs are hidden in different departments,” said Abou Hamad.

In turn, measuring and managing the actual, real, honest-to-god carbon footprint and other sustainability metrics in the supply chain follows a similar path — a tortuous one. Some years ago, a supermarket chain in the U.K. started labeling its fresh produce according to how far each item had traveled, so that it could give shoppers an easy-to-grasp rating on sustainability. Only trouble was, tomatoes grown out of doors in Kenya used up a lot less energy getting shipped to Southampton than tomatoes grown indoors, with electric heating, in England. That’s why scrutinizing the entire supply chain, from design to delivery, is critical.

The challenge doesn’t stop there, though. It’s not as if every department head is just waiting for the chance to temper his or her business decisions according to how they’ll play out elsewhere in the company. It’s a procurement manager’s job, after all, to minimize spending. Pushing for a more nuanced approach to pricing from your colleague can be a hard sell. “This could affect his year-end bonus,” said Abou Hamad. “You think he’s going to help you? This is the real world.”

That’s why it’s important to have buy-in on goals throughout the company, including C-suite executives and shareholders. “You have to work together and break those silos,” said Abou Hamad. “If you don’t work together as a team to gather all these data points, you will not know what you’re doing.”

Abou Hamad says there’s no one-size-fits-all approach when it comes to assessing the financial viability of sustainability initiatives. Much depends on the specifics of the business you’re in. But certainly it’s necessary to conduct a meticulous end-to-end evaluation of the supply chain, and to have cross-departmental communication and collaboration. He also suggests developing sustainability dashboards that are tied directly to financial performance. That way, sustainability advocates can justify capital expenditure on sustainability initiatives via hard ROI figures (sometimes, one initiative can fund another). And they should also showcase examples, whether from inside or outside the organization, where sustainability has driven revenue and margin growth.

“Balancing what’s profitable and what’s good for the planet is doable. It’s within reach for everyone,” Abou Hamad said. “Start now. Scale up.”