How hard is it to improve Supply Chain ESG? It is hard in some aspects, but the E may be improved significantly by enhancing existing planning systems with load building optimization software.
But first, let’s look at ESG.
Supply Chain ESG
ESG (Environmental, Social, and Governance) approach is becoming a new norm, morale, and best business practice. ESG is a set of standards the company uses.
Environmental in ESG means how a company protects the environment and includes corporate policies addressing climate change—social covers relationships with employees, suppliers, customers, and communities. Governance is for a company’s leadership, internal controls, and stakeholders’ rights.
The MIT Center for Supply Chain and Logistics study reinforced the importance of Supply Chain ESG.
David Correll, quoted in the Wall Street Journal, said, “One takeaway from [our survey] is that supply-chain sustainability seems to be here to stay, and it’s real.
Over three years of observation, every source of sustainability pressure that we monitor, for example, government regulations, customers, investors – has increased in perceived pressure.” So, in summary, the expectations are increasing.
Companies should take action now as the pressures and requests of society for ESG will continue to grow. Correll again: “Firms should take away from [the MIT survey] that what is enough now to impress your customers, your regulators or investors is not likely to be sufficient next year or for a different group of customers or regulators or investors.”
It’s a big task to maintain an efficient supply chain. Moreover, it is even more difficult to roll in all the supply chain ESG mandates.