There are very real and very concrete business benefits related to a program promoting sustainability in the supply chain. Here we break down the top five that we see.
#1: Improving customer satisfaction.
Every company needs to keep its customers happy, and in today’s hyper-aware consumer culture, sustainability is a key element of that. Consider the food industry: 50 years ago, few people were aware of inhumane practices in processing animal products — and even fewer people cared. But now you can go to any grocery store and find beef boasting that it comes from grass-fed cows, and eggs that come from cage-free chickens. The food industry learned that its processes needed to be sustainable if they wanted to keep their customers happy — and other businesses are in the process of learning that very same lesson right now.
#2: Complying to regulations and standards.
Regulations concerning sustainability are on the rise, and it’s essential that supply chains comply with them. The Clean Water Act in the US, for example, regulates the release of pollutants into US waters. You better believe that complying with this regulation is an advantage to your organization — or you’re likely to see some legal consequences in your future.
#3: Avoiding reputational damage.
You know what’s even worse than a government fine because your company or one of your suppliers hasn’t complied with a specific regulation? The bad press that you’re going to get from it. Whoever said that any press is good press was definitely not thinking about getting in the news for violating sustainability expectations. Take, for example, when the Environmental Protection Agency (EPA) found that many VW cars being sold in the US had a “defeat device” in diesel engines that could detect when they were undergoing emissions tests and would change their performance accordingly to improve the results. After this scandal, VW lost the trust of consumers worldwide and recalled millions of cars, resulting in the company reporting its first quarterly loss in 15 years. And it wasn’t a small lost, either: $2.7 billion.
#4: Qualifying for certifications that give you credibility.
It’s one thing to say that your company is exercising sustainability — it’s quite another to prove it. There are an increasing number of organizations that now offer certifications to demonstrate that companies are working with sustainability in mind. The Green Business Bureau's (GBB) certification process, for example, awards points for each sustainable activity an organization completes, and also provides guidance around future initiatives that might help your business.
#5: It makes the world better.
Don’t get us wrong — sustainable supply chains do have all the business benefits we just listed. But let’s not overlook the most basic reason: Sustainable initiatives make the world better. And every business should want to have a part to play in something like that.