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Green Becomes Indelible Marker

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The important role sustainability plays in supply chain practices is revealed in an annual survey by London-based Eye for Transport. The report, which will be reviewed in depth at the Sustainable Supply Chain Summit on Oct. 15 and 16 in San Francisco, highlights current opinions and practices. It also compares this year’s metrics with the state of supply chain sustainability reflected in last year’s survey results, which provides an interesting perspective on how the industry is trending.

Among the key findings: The number of respondents who said environmental issues are very important to their company’s overall strategy was notably higher in 2009 than in 2008: 41% versus 29%.

With respect to the future, 70% of the respondents said that the importance of environmental issues on supply chain processes will increase over the next three years.

Conducted in July and August, the survey canvassed supply chain practitioners in companies with revenues from less than $50 million to more than $1 billion.

Energy tops green initiatives: The report found that companies’ efforts to make their supply chains more environmentally responsible run the gamut from transportation practices to manufacturing decisions. But the initiative identified most frequently was improving energy efficiencies, with 75% of the respondents using or planning to use such tactics.

More than half of those surveyed indicated they were measuring or reducing emissions (53%) or were establishing a corporate “green team” (51%). Other measures that were identified by a significant percentage of supply chain professionals included rerouting vehicles to reduce mileage (47%); choosing to partner with logistics providers that were more environmentally friendly (45%); designing processes that were more compatible with the environment (44%); and strategically positioning warehouses and distribution centers (44%).

To a lesser degree, companies have begun to use near and/or green sourcing (34%); alternative fuels (34%); greener manufacturing processes (29%); collaborative partnerships (28%); transitioning from air freight to other modes of transportation (27%); and carbon off-setting (24%).

Motivation for moving to greener practices centered around perceived improvements in efficiencies and/or in customer and public relations. But the biggest barrier preventing adoption of sustainable initiatives was the perception that customers are not willing to pay extra for products that are more expensive as a result of environmentally friendly implementations.

Eighty-four percent of the people surveyed cited this concern as a barrier, a pronounced increase over the 78% who ranked this as a barrier in the 2008 survey. Clearly the macro-economic conditions reverberating through global markets contributed largely to this perception.

The recession appeared to have had less impact on corporate sustainability budgets, though, as the majority of those questioned, 57%, said they did not expect their company’s investment in green initiatives to be impacted by the economic downturn.

On another positive note, more than half of the respondents, 60%, expressed confidence that environmental initiatives would yield a positive ROI within three years.

In terms of quantifiable improvements, nearly half, 49%, of those surveyed reported increased efficiencies as a result of environmental programs, compared with only 38% of the 2008 respondents who reported measurable increases in efficiencies.

© 2014