Despite the current recession, leading corporations across all industry sectors are increasingly making sustainability an integral element of their strategy. For many companies, sustainability is expanding to the supply chain, but a recent survey by GTM Research shows that sustainability is not a prime driver of supply chain agendas. It lies in the middle of the pack of supply chain priorities. However, companies are investing in this area and three-quarters of respondents believe that their company's environmental stance will have a material impact on customer relationships within the next three years; just over a third of them feel the issue is material with customers today.
The survey of 74 supply chain executives also revealed the following:
The quest for energy efficiency is more popular than any other sustainable supply chain activity this year.
Some 70 percent of respondents said they had already implemented a commitment to recyclable and upgradable product design.
Fewer than half of the respondents are using efficient, low-emission vehicles, are working with transportation providers that do, or are tracking the environmental impacts of transporting their products.
Many companies have plans to invest here in the next one to two years.
Many companies have not yet integrated the systems that manage their environmental information with those that manage their supply chain activities, presenting a hurdle for those companies seeking to make environmental concerns a factor in supply chain design and operations.
A minority participate in third-party sustainability reporting initiatives such as the Carbon Disclosure Project. But 80 percent of respondents say they will be reporting in the next 12 to 24 months.
Companies cite a lack of a defensible financial rationale and a challenge sorting out conflicting priorities as the biggest barriers to greater sustainability in the supply chain. Nonetheless, a significant majority of companies believe that greening their supply chains will pay off over time, in some combination of brand enhancement, efficiency gains and cost savings.
Overall, supply chain spending plans remain fairly firm this year. A majority of respondents said that their 2009 supply chain spending will increase versus 2008 spending levels, by an average of 11 percent. In aggregate, respondents are increasing spending by 3.8 percent.
An executive summary of the report may be downloaded at the link below.
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