Sustainable Supply Chain Management

Supply Chain Sustainability Management is a critical aspect for organizations worldwide, regardless of whether they have a dedicated procurement department or if individual employees handle procurement tasks. In the realm of sustainability, organizations must carefully assess their impact on the environment and the well-being of individuals along the entire supply chain.

Sustainable supply chain management involves an organization’s proactive measures to minimize environmental impact, emphasizing ethical sourcing, and ensuring that suppliers adhere to ethical practices. It requires consideration of the environmental and human consequences of a product’s journey from raw material acquisition through production, storage, delivery, and every transportation link in between.

The primary objective of sustainable supply chain management is to uphold both environmental and societal values, addressing global issues such as climate change, water security, deforestation, human rights, fair labor practices, and corruption.

Navigating the complexities of supply chain relationships poses a challenge to visibility. Commitment to sustainability entails understanding the Environmental, Social, and Governance (ESG) impacts throughout the supply chain, which demands considerable effort. However, the fragmented technology landscape poses a hindrance, limiting collaboration with suppliers. Incorporating technology is crucial for tracing production and transportation activities, facilitating informed decisions.

Challenges further arise due to a lack of expertise in integrating ESG considerations into procurement and supply chain roles. Limited awareness of what procurement professionals should prioritize when selecting suppliers hinders sustainable decision-making. Misaligned key performance indicators, often focusing on short-term financial gains, contribute to unethical practices, such as sourcing products made through child labor.

Low visibility and traceability across the supply chain compound challenges, as it is challenging to track the entire journey of a product from raw materials to finished goods. Differences in regional ESG policies, priorities, and cultures among suppliers from various regions also present difficulties in assessing sustainability.

Given that supply chains significantly impact a company’s environmental footprint through energy-intensive production and global transportation, organizations focusing on supply chain modifications rather than operational changes are likely to achieve greater sustainability. This can involve recycling materials, buying locally to reduce shipping, avoiding unnecessary repackaging, and adopting renewable energy sources and energy-efficient technologies.

Procurement and supply professionals play a vital role in achieving sustainability goals, necessitating their understanding of sustainability frameworks. The Global Reporting Initiative Standards provide a comprehensive framework, enabling professionals across sectors to assess and enhance their sustainability efforts.

To gain expertise in these frameworks, interested individuals can enrol in the Global Reporting Initiative Training at Traction by visiting the website www.sgb.ac.ke.