Transparent Supply Chains
As environmental pressures rise, governments and people alike will require hard proof of companies‘ sustainability efforts. Promises and empty phrases will no longer be enough but honesty will be greatly appreciated. Customers will expect easy ways of following the supply chain to the source of the product or material and reviewing information like LCA (life cycle assessment) results.
In this world, companies downstream in the supply chain will suffer from the actions of their suppliers if the public learns about, for example, suppliers‘ unsustainable practices. Those who do not provide such crucial information can expect a shrinking customer base and a worsening brand image. On the other hand, companies utilizing technologies that enable tracking of products like blockchain can boost their image and reap many more benefits.
EXAMPLE:
Roche, one of the largest biotech companies, is among the leading suppliers of diagnostic and pharmaceutical solutions. As the majority of emissions in the healthcare sector are produced in its supply chains, Roche established a few key areas of sustainability that they will focus on in the future. Among them are areas like society, environment, and economy.
However, achieving any goals in said areas is not possible if the changes are not applied throughout the entire supply chain. Therefore, Roche now checks how its suppliers act concerning the climate crisis and supports them in reducing their environmental impact.
Expert Statement Markus Riepl:
Sustainability activities are already started and executed in the diagnostics industry. Suppliers are requested to register on platforms like EcoVadis or manufacture2030 to share with partners company’s ambition and actions. Nowadays, customers give sustainability measures a major weight in overall supplier performance measurement.
Expert Statement Elisa Frenz:
There are many brave pioneers who simply try to say, „hey, we don’t want to put price above everything, so if we invest more now, we’ll reap the rewards in sustainability.“ I find that incredibly courageous, because no business leader is measured by that criterion; no one is celebrated for spending more money in the first place. But I think in the medium and long term, it’s ultimately more beneficial. But we don’t have the right parameters for that, to show this value on the balance sheets, and to even make those financial decisions. And I think that has to change. And I also think that such purchasing decisions should be rewarded, in order to ultimately help the organization to purchase more sustainably.