In a truly sustainable enterprise, ESG initiatives extend far beyond the four walls of the company. With nearly 80% of consumers saying sustainability is important to them and 60% willing to change purchasing habits to reduce environmental impact, what happens in the supply chain is just as important as what happens in the business itself.
Today’s enterprises must be able to understand where and how the items and commodities they buy are sourced. They must be satisfied that the entire supply chain meets their own—and their customers’—standards for sustainability, as well as any standards demanded by regulators. And they must be capable of taking action where standards fall short—by finding alternative sources, or by influencing behavioral change in the supplier base.
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80% of consumers say sustainability is important to them and 60% are willing to change their purchasing habits to reduce environmental impact.¹
Supply chains often account for more than 90% of an enterprise’s greenhouse gas emissions, when considering their overall climate impacts.¹
Accelerating sustainability and transparent reporting with digital supply chains.
Enterprises need to enable supply chains to reduce carbon footprints and human rights risks while building brand equity and top-line growth. The ability to trace products and ingredients back to their source is essential to certify they were produced in an ethical and sustainable manner—an area where blockchain is becoming a key enabling technology. Understanding the carbon footprint of production and logistics is also key, as scope 3 emissions can account for up to 90% of your overall greenhouse gas emissions.¹
In some industries, supply chain visibility has tended to be a voluntary initiative rather than a mandated requirement. But the tide of customer and investor sentiment is changing. Companies that want to flourish and grow increasingly need to be able to report accurately and fully on supply chain sustainability. That accuracy, combined with the need to react faster and more effectively to supply chain disruptions, is driving demand for advanced supply chain intelligence solutions.
IBM Supply Chain Intelligence Suite improves supply chain resiliency through actionable insights, smarter workflows and intelligent automation. Turn disruptions into opportunities by enabling fully transparent, traceable and decarbonized supply chains with benefits, such as reducing inventory levels by 18% and the time to trace product provenance from store to farm from days to seconds.
Waste is a major problem throughout the supply chain—from overuse of packaging and the use of nonrecyclable materials to inefficient shipping and routing driving up fuel consumption and emissions.
Many organizations are looking for ways to eliminate waste in all its forms—including adopting recyclable packaging materials, optimizing routing and avoiding the landfill by introducing refurbishing, recycling and repurposing schemes.
Aside from the reduced environmental impact, a key benefit is an associated reduction in costs. E-commerce companies using IBM Sterling® Order Management, for example, have been able to reduce expedited freight costs by 52%, as well as realize carbon footprint savings.
IBM Sterling Order Management allows you to optimize order fulfillment and consolidate shipments into fewer packages with greener shipping methods. Savings in product waste, reduced shipping packages, and smart order routing and orchestration help to reduce their carbon footprint. Powerful integration with carbon accounting engines means carbon savings can be shown to online shoppers when asking them to make their shipping choices.
Footnotes
1. Meet the 2020 consumers driving change, IBM Institute for Business Value in association with the National Retail Federation, June 2020.
2. Supply Chain Guidance (Link resides outside ibm.com), United States Environmental Protection Agency, 17 January 2023.