By Theuns Kotze
When you consider that supply chain operations account for over 90 percent of an organisation’s greenhouse gas emissions, it follows that they are likely to be a business priority for any organisation seeking to achieve its sustainability goals.
The last 12 months alone have seen increased pressure on global supply chains to address sustainability impacts. The convergence of geopolitical tensions, economic uncertainty, extreme weather events and technology-powered digital disruption, along with increasing regulatory requirements, is directing organisations to focus on reducing environmental impact and improving social responsibility within their supply chains. As the fastest-growing economy in the world, at a rate of 7.2% GDP, India is becoming an important player in global trade. There’s a huge opportunity for Indian organisations managing supply chains to accelerate progress on sustainability goals by focusing on human rights, labour practices, and environmental impacts.
How can organisations of all shapes and sizes prioritise supply chain sustainability in the year ahead?
Evolving regulation and transparency: Proactively build a clear understanding of sustainability-related regulations relevant to your organisation depending on location, operations and geographic or sector-specific risks. As identified in the 2024 Supplychain Risks and opportunities report, the next few years are expected to see an increase in sustainability reporting requirements, including accounting for social and environmental due diligence.
India’s Business Responsibility and Sustainability Report (BRSR)—a framework for environmental, social and governance (ESG) reporting came into effect in July 2023. The BRSR is the first framework in India that requires organisations to provide quantitative metrics on sustainability-related factors, which has put more focus on supply chain partners.
Organisations can get ahead by understanding the scope of these requirements and the data they will need to collect. Further to this, Deloitte reports that that consumers continue to become more environmentally conscious, which means that transparency in the steps taken by organisations wanting to improve the sustainability and ethics of their supply chain has the potential to be important for commercial success.
Data: Identify where sustainability data is held within your organisation and use it to underpin decision making to mitigate risk and progress towards a more sustainable supply chain. As set out in BSI’s report, the ability to transform raw data into actionable insights has the potential to help organisations answer today’s increasingly difficult questions and, in turn, drive cost and time efficiency.
Engagement: With a greater focus on regulation or reporting requirements, those managing supply chains are facing greater expectation around transparency and knowledge of their wider supply chain. Organisations can get ahead by mapping, prioritising, and determine the correct level of engagements with their entire supply chain, ensuring that their business partners are meeting expectations.
Collaboration: Change cannot be brought about in isolation. Collaboration is required internally across your organisation and externally through the supply chain. The report finds that collaboration can empower organisations seeking to open the opportunity presented by today’s supply chain challenges and that trust is the key to successful collaborative relationships.
Ethical Supply Chains: People make supply chains function. It is important to establish controls to protect the people at the heart of the supply chains, including those that not directly employed (such as migrant workers or subcontractors) by ensuring that you are managing supplier relationships and engaging suppliers on key human rights requirements. Mapping areas of highest human rights risks, and targeting suppliers operating in these environments, can help address these issues.
Ultimately, embedding sustainability in supply chains can bring enormous benefits to people and the planet, and help to accelerate progress to a fair society and a sustainable world.
The author is Managing Director, Assurance IMETA, BSI.
Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.
