Global supply chains are composed of a vast network of organizations and individuals that work together to bring goods and services to market. These are highly complex networks made up of different actors, all playing their part in helping to provide a good or service that can be brought to market. Retailers play a critical role in these supply chains, as they are often the link between manufacturers, suppliers, and consumers.
Supply chain sustainability is a hot topic nowadays, and retail procurement and sourcing teams are placing more emphasis on sustainability than ever before. Some key advantages of driving sustainable development with your supplier are as follows;
- Mitigating risks by ensuring their supply chains are ESG (environmental, social, and governance) compliant. This can involve working with multiple tiers of suppliers upstream to the source of a good or service.
- Sustainability is also becoming increasingly important to investors, who are looking for companies that are taking positive steps to reduce their impact on the environment and society.
- Consumers within their stores are looking to purchase sustainable products that can be traced and verified as being sustainable.
- Retail brands are under constant pressure to be good actors and source only goods and services from suppliers that have a level of due diligence placed on them.
- Another additional incentive of engaging with suppliers on sustainability provides the retailer access to sustainable finance solutions, such as sustainable supply chain financing.
- Allows the retailer to more easily access investment from global markets or its shareholders. There is a clear link to access capital with sustainability transparency and performance.
- Helps the retailer achieve their sustainability targets and objectives such as carbon zero targets, UNSDG’s etc
One key way that retailers can drive sustainable development within their supply chains is by engaging directly with suppliers. This helps ensure that suppliers are aware of the importance of sustainability and are taking steps to address environmental and social issues within their own organizations.
Overall, supply chain sustainability is a win-win for retailers and suppliers alike. By working together to drive sustainable development, retailers and suppliers can mitigate risks, access investment, and create positive impacts within their global value chains.