Supply Chain Sustainability: Why It Is Important and Best Practices

Develop supply chain sustainability initiatives with effective supply chain sustainability management and strategy.

Supply Chain Sustainability Trends

The expectations of stakeholder groups for supply chain sustainability strategy have transformed in the last 10 years, with increased demands for transparency and action in sustainability performance.

While some supply chains convert sustainability into a competitive advantage, others struggle to meet core stakeholder expectations.

Chief supply chain officers (CSCOs) can position the supply chain to respond to sustainability trends.

Download the report to learn three key trends in supply chain sustainability that can enable a transition to a low-carbon, resilient and resource-efficient economy.

Download the Supply Chain Sustainability Report

Explore three key trends in supply chain sustainability.

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    Opportunities and Challenges in Supply Chain Sustainability

    Supply chain sustainability delivers business value. It reduces costs, spurs productivity and in some cases drives returns. There are also regulatory and compliance reasons to focus on supply chain sustainability. The supply chain organization is well-positioned to help the enterprise balance its profitability and purpose goals as it shifts to supply chain sustainability. The CSCO then must be ready to advise his or her C-suite colleagues, the board and investor relations leaders on how supply chain sustainability addresses ESG (environmental, social, governance) risks and drives competitive advantage.

    But 30% of supply chain leaders today say they have no or low-maturity supply chain sustainability goals. Common obstacles when building a sustainable supply chain include limited resources, conflicting priorities, lack of understanding of sustainability concepts and low visibility on early wins.

    30% of supply chian leaders say they have no or low-maturity sustainability initiatives.

    Preparing for a Future of Supply Chain Sustainability

    The business case for supply chain sustainability is clear. Increase the maturity of your supply chain sustainability initiatives by following and modeling leaders: Gartner is a partner to hundreds of winning supply chain organizations and has studied and documented in detail their practices for reducing waste in operations, improving energy consumption and managing supplier relationships for responsible sourcing. We also can guide you in assessing your sustainability performance and prioritizing the right supply chain sustainability investments.

    Profitability contains revenue growth and profit margins. Sustainability contains resource efficiency, long-term growth, and worker well-being.

    Supply chain sustainability insights you can use

    Gartner insights, advice, data and tools help supply chain leaders develop supply chain sustainability initiatives like smarter packaging, responsible sourcing and strategic materials usage. These supply chain sustainability initiatives deliver not only sustainability but also profitability.

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    Gartner supply chain sustainability case studies

    Companies don’t become green or committed to sustainability as a consequence of pressure from the outside or because of a new CEO who decides to put sustainability on an annual report. Organizations need to embed sustainability into their DNA.

    Chief Supply Chain Officer

    Consumer Goods Industry
    Case study

    Discover supply chain best practices from your peers

    During this on-demand panel discussion, you’ll hear from supply chain leaders on how they are continuing to lead during times of disruption. 

    Watch Panel Discussion: Lead Through Times of Disruption in Supply Chain to learn:

    • Real-life examples of how companies leveraged Gartner insights and tools to navigate disruption
    • Supply chain innovation and agility during times of disruption
    • How to address your most pressing supply chain challenges

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    Supply chain sustainability FAQs

    Supply chain sustainability includes planning and executing environmentally responsible business practices within the end-to-end supply chain. These include sustainability commitments such as responsible sourcing, greenhouse gas emissions reductions, renewable energy usage in operations, and reduction or elimination of waste sent to landfill.

    Sustainability expectations around the value supply chains deliver are accelerating amid ongoing volatility, disruption and gridlock. As impacts from the pandemic, global conflict, climate change and other factors continue, supply chain leaders must be ready to mitigate risk and navigate uncertainty in an increasingly dynamic and challenging environment.

    Supply chain sustainability objectives include meeting growing customer expectations for social and environmental sustainability, maximizing business impact and creating a competitive advantage by shifting away from discrete projects toward transformational change.

    The elements of supply chain sustainability include economic, social and environmental impacts:

    • Economic — Impacts to human communities and economic systems.
    • Environmental — Impacts to the earth’s resources.
    • Social — Impacts to people and human rights.

    To become truly sustainable, supply chains must first overcome four major barriers that promote incrementalism and inhibit sustainability transformation. These include enterprise knowledge gaps, significant upfront costs, mixed customer signals and partners’ barriers to transformation. To overcome these, supply chain leaders should:

    • Foster a culture of experimentation by enabling staff to conduct minimal, iterative tests of potential sustainability approaches to close the gap in knowledge.

    • Develop cost-sharing agreements with partners in your ecosystem and beyond to achieve sustainability goals and reduce upfront costs to sustainability.

    • Nudge customers to send clear signals about the importance of sustainability, thereby allowing supply chains to make a strong business case for transformational improvements.

    • Coordinate sustainability communications and resources across the ecosystem to mitigate partners’ own barriers to transformation and enable achievement of sustainability goals.

    Deliver business value from supply chain sustainability

    Gartner provides trusted insights and objective advice to help its 2,500+ supply chain leader clients develop supply chain sustainability initiatives.