If one thing is clear, it's this: The term "sustainable supply chain" has long since ceased to be just a buzzword - but is gradually morphing into an option that companies must consider. If they don't, climate change will become even more real than it already is.
This is precisely why the German government passed the Supply Chain Act in 2021: This requires larger companies (>3,000 employees*) to review and improve their global value chains. The goal: avoid forced labor and environmental damage. Deadline: January 01, 2023.
Time is running out: for the earth and for companies that are not (yet) sustainable. So in the future, it will no longer be "just" individual sustainable actions that will be on the agenda, but the big picture.
Of course we think that's great. After all, the benefits of sustainable supply chains are undeniable: Less CO2 emissions, better conditions for everyone involved in the supply chain, better image... We could go on forever. But let's rather start at the beginning first:
What is a sustainable supply chain?
The term "supply chain" in itself refers to the network of transport, workers, production, etc. that ensures the transport of a product from its starting point to its destination. The process in e-commerce from the customer's order to delivery to the door is therefore part of the supply chain.
Accordingly, a sustainable supply chain is one that is optimized in such a way that it causes as little damage as possible to the environment, or ideally none at all. This includes good working conditions, environmentally friendly materials or CO2-free delivery.
If we look at the "official" definition of a sustainable supply chain, it looks like this:
"Management of environmental, social and economic impacts over the entire life cycle of products and services (...). The goal is to create long-term environmental, social and economic benefits for all stakeholders involved in production and marketing."(Source)
In other words: If you want to make your supply chain sustainable, you have to consider a number of factors. For example, the product's journey, from manufacture to transport, is assessed, evaluated and ultimately improved. This begins with production in the countries of origin, and continues through manufacturing and logistics to the last mile at the end of the supply chain.
What makes a supply chain sustainable?
The fact alone that the Federal Environment Agency's guide dealing with sustainable supply chain management has 64 pages shows: There's a lot to do here! But in keeping with the motto "Every little bit helps", we should not let this deter us. So let's get started!
Before measures are taken, all those involved must first be clear about what goal they are pursuing and what exactly they understand by sustainability. Therefore: First formulate benchmarks, guidelines and visions. These are then passed on to all stakeholders and suppliers so that they can also sign off on them. Areas affected by this include compliance, resource efficiency, supplier management, employees, product responsibility or safety.
Then it's down to the nitty-gritty: For example, companies can - and should - ensure that certain standards are met in the countries of origin. One way of doing this is through cooperation, as the "Fashion Revolution" movement shows: Several companies and individuals are working to put people over profit and protect the environment in the beleaguered and unsustainable fashion industry.
Digitalization and the use of modern technologies are also necessary steps to improve the supply chain. Thanks to them, it is possible to monitor whether the set standards are also being adhered to. Controlling the work steps and analyzing important data is easier.
Just as advanced: modern cooling and heating technologies (e.g. solar cells, building insulation...), use of LEDs (are longer lasting, consume less energy), cargo bikes for the sustainable last mile and co.
As you can see, there are a number of parameters that can be adjusted to achieve a sustainable supply chain. Important here: Not everything has to happen at once. Every small step counts. And every kilogram of CO2 that is not emitted is a good kilogram of CO2. What's missing now? The first step! Because you will never want to miss the advantages that result from this...
Good for you, your business, the environment
The most obvious benefit: You protect the environment. With every sustainable innovation, you're doing your part to make the earth a little greener. In connection with this, you set a good example. On the one hand, you improve your image among your customers: For example, a Forbes study reveals that 88% of consumers surveyed are more likely to remain loyal to a brand that is environmentally responsible. On the other hand, other companies perceive you as a pioneer and realize: "It's not that hard after all...".
In addition, you improve the relationship with your suppliers through your commitment. They feel valued. And your supply chain becomes not only more sustainable, but also more transparent and resilient. Another pleasant benefit: Thanks to better relationships with suppliers, material, energy and transport prices can be reduced sooner...
As an employer, you automatically put yourself in a better light. Many employees are looking for a company that places value on sustainability. The survey conducted by StepStone and HRI confirms: 81% of the participants find sustainability (rather) important. By focusing on sustainability, you seize the opportunity to reach exactly those employees who share the same values and ultimately can and want to make a difference.
But it's not just employees who will automatically take notice of you: potential investors or stakeholders will also see your company as competitive and at the same time sustainable - which will be worth much more in the future and can bring you more support (or, to put it simply: money).
What challenges should I expect?
"Where there is light, there is also shadow" almost passes for a hackneyed calendar saying, but when it comes to sustainability in the supply chain, it is nevertheless truer than ever. After all, the benefits that come with a sustainable supply chain are undeniable. However, in order to enjoy them, a number of things need to be done.
One thing that should not be underestimated is the complexity of the supply chain. You cannot make it sustainable from one day to the next, but must proceed step by step. Don't rush things and take your time - because you need it. Unfortunately, there are still unscrupulous suppliers who won't come forward with information about working conditions and the like. These challenges can make the sustainable supply chain project drag on.
Especially as a small or medium-sized company, it is also rather difficult to provide the necessary funds. Especially in the exciting start-up phase, the focus is usually more on sales and growth and less on sustainability in the supply chain. Related to this is the desire for profitability, which is at odds with sustainability. Indeed, the latter does not deliver tangible "results" immediately, but only in a few years. However, being profitable pays off in the truest sense of the word after a short time.
It is precisely this short-term thinking that often stands in the way of sustainable supply chains. The question "why should I invest in something that doesn't benefit me now, when I could also make normal sales instead?" is a barrier that is unfortunately still embedded in many people's minds.
Whose supply chains are sustainable?
Fortunately, however, there are companies that are already fully committed to sustainable supply chains and are leading by example. The first thing to mention here is that 100% sustainability is very difficult to achieve. However, a good clue to recognize sustainable supply chains/best intentions is transparency.
The best example: Patagonia. Right from the start, the outdoor brand has taken sustainability seriously, answering every question about origin, carbon footprint, etc. in detail and not shying away from quoting figures. The "Our Footprint" section on the website speaks for itself...
The cosmetics manufacturer Weleda also attaches great importance to a respectful and transparent supply chain. For example, they work with questionnaires on which the suppliers indicate where the raw materials come from. Only after all the information has been collected and approved is the supplier given the go-ahead. Ethical standards, organic cultivation and constant monitoring are also key factors that Weleda uses.
In addition to Weleda, the systain study from 2019 also mentions other companies that (would like to) implement sustainable supply chains. A selection: devolo AG, Faber-Castell or Worlée.
Even small companies like NIKIN from Switzerland are already doing their best: You can even find a FactoryTracker on their website, which offers an overview of all their manufacturers and scores with additional information about the respective producers. If THAT isn't commitment, isn't it!
And how do I find sustainable suppliers?
The simplest solution: Ask! Both with suppliers and with companies such as NIKIN that have already taken the research step. Get inspiration from your (work) environment and just ask around. They will certainly be happy to help you - because who would want to prevent more companies from becoming sustainable?
The systain guide just mentioned also provides some assistance. No matter if you need inspiration, further links or realistic questions depending on the situation: You will always find what you are looking for here.
In general, however, it's best to start by setting your own conditions. What standards should be met? What is your code of conduct? What are your values? Then you can analyze potential suppliers (as Weleda does, for example, using a questionnaire or similar). Make sure to always communicate openly and honestly to create a long-term stable relationship from the beginning. During this phase, you can also visit a factory: This way you can introduce yourself and convince yourself with your own eyes of the hopefully good conditions.
Take a deep breath - a lot of info at once, we know! However, we can only repeat our promise from the beginning: It's worth it. As already stated, not everything has to happen at once. For example, how about starting by defining what exactly you want to achieve, what your values are, and how you want to live sustainability?
For sure, one of your goals will be "as little CO2 emission as possible" (or: at least it should be!). Here, we as Delivery Green are of course happy to offer our help: You see, we specialize in the sustainable last mile. A section of the supply chain that unfortunately emits an unnecessary amount of CO2, which is avoidable.
A small calculation example: If your company sends 20,000 parcels per year, almost 200,000 kg of CO2 are emitted over the last mile... In other figures: It would take 760 mature trees to compensate for this.
Frightening, isn't it? That's exactly why we deliver emission-free with electric vans and cargo bikes. So we're making a big contribution to making even more supply chains more sustainable. Want to see for yourself? Take a look at our customer stories.
As you can see, we don't just have to act because of the Supply Chain Act. But also because of the environment. Sustainable supply chains are so in - and more important than ever. Any questions?
(if you answered this last question with "yes": feel free to contact us! We help where we can).