Supply Chain and its Environmental Impact


    Supply chain sustainability is a trending topic nowadays because of people’s growing awareness to keeping the Earth sustainable. The topic of sustainability is defined as the quality of not being harmful to the environment or depleting natural resources, and thereby supporting long-term ecological balance. Environmental impacts from supply chains can include toxic waste, water pollution, loss of biodiversity, deforestation, long-term damage to ecosystems, hazardous air emissions as well as greenhouse gas emissions and energy use.

    There is an increasing need to combine environmentally friendly choices into supply-chain management.  Your supply chain costs impacts the environment because if you deliver products more efficiently, it can reduce your carbon footprint on the environment. Companies are now implementing sustainability programs to help the environment by reducing miles, reducing production costs, and reducing product waste as well as unplanned activities.

    Importers & exporters collaborate with their suppliers to communicate their values and expectations in their sustainability efforts. Many companies, such as retailers and major brands in the U.S., have started evaluating the environmental performance of their suppliers. They use surveys and questionnaires to assess their greenhouse gas emissions, energy & water usage, and waste generation. This data is used to identify the necessary improvements that a company should make to reduce harm to the environment.

    Companies with sustainability initiatives will work with suppliers to identify sources of pollution and waste to discover preventative measures. They would also encourage suppliers to use cleaner and more cost-efficient means of production to prevent pollution. The goal is to extend the responsibility within the supply chain.

    Making the planet a greener place is not the only perk of being environmentally aware. Companies who strive for sustainability also have business advantages such as improved business image, lowered risk of non-compliance, attraction of other environmentally aware customers (this group is growing larger), improved productivity and quality, and an increase in more sustainable products.

    Another aspect of sustainability in the supply chain is the social and economic responsibility; this encourages companies to use good governance practices. The United Nations Global Compact has ten principles of supply chain sustainability:

    • Principles 1 – 2: businesses should support the protection of human rights and also make sure that people’s rights are not abused.
    • Principles 3 – 6: strives to protect the labor force by eliminating forced labor, child labor, and eliminate discrimination in the workplace.
    • Principles 7 – 9: support protecting the environment as discussed above
    • Principle 10: prevent corruption in all forms such as fraud, bribery, and extortion.

    More details about the ten principles can be found on The UN Global Compact’s website.

    Environmental leaders and organizations are creating practical guides for companies to follow. The goal is to teach companies how to continuously improve their sustainability practices. If a company adopts these responsibilities, it will help manage their business risks, improve efficiency, and aid in keeping up with the changing trends in the market and in technological advancements. The company can influence their suppliers and all stakeholders in their supply chain to practice the same, and this nonstop cycle will eventually impact society and the earth on a much larger scale.