Making the Business Case for Improving Supply Chain Sustainability

Mar 04, 2021
Sustainability, globe in hands

A manufacturer’s supply chain is a primary source of both Scope 1 emissions under its direct control and Scope 3 emissions from assets such as upstream suppliers not under their control. The new Techstars Sustainable Supply Chain Innovation Report examines how a growing community of technology startups is helping corporations solve issues of limited supply chain visibility and embrace a mindset shift towards adopting and creating novel sustainability solutions and best practices.

The report’s key takeaway: if your business is not prioritizing improving supply chain sustainability, you’ve likely already ceded ground to your competitors who do. 

The Business Case for Sustainability

23% of Fortune 500 companies have committed to be carbon neutral, use 100% renewable power, or meet a science-based internal emission reduction target by 2030 — a four-fold increase since 195 countries signed the Paris Climate Accord in 2015. 

“Climate action no longer sits in the optional category of corporate responsibility,” said Saskia Feast, Ph.D., VP Western Region at Natural Capital Partners (NCP). “Today the commercial incentives for taking climate action are proving too big to ignore. Whether it’s the demands of employees, the ability to hire the best talent, managing risks in supply chains, operational continuity, regulation, investor interest, or customer expectations, the business case is clear across all sectors.” 

That business case clarity comes from consumers and financial markets worldwide increasingly showing favor to companies that have made sustainability a core pillar of their business strategies. A recent BCG survey reveals that 95% of consumers believe their actions impact climate change, and their decision-making will continue to extend beyond categories of products (EV vs. petroleum, plant-based vs. meat-based diets, etc.) to brand vs. brand decisions and eventually SKU vs. SKU decisions. 

Therefore, financial markets are rewarding companies who demonstrate their commitment to their environmental, social and governance (ESG) initiatives. Harvard Business Review reports that the demand for ESG investment options is so high that many asset management firms are rushing to pull together new offerings.

Where To Begin? 

Eliminating one-time use plastics can help a company make significant progress towards realizing its overall supply chain sustainability objectives. In the traditional linear supply chain model, companies extract petroleum from the earth, turn it into plastic materials that manufacturers incorporate into their products and packaging. Consumers and businesses use these products for a short time, then discard most into landfills

The Techstars Sustainable Supply Chain Innovation Report highlights how technology startups like Craste are developing plastic alternatives made of more sustainable materials. India-based Craste, a graduate of the STANLEY + Techstars Accelerator, works with farmers to gather crop residue that would otherwise be burned (and release hundreds of millions of tons of CO2 into the atmosphere) and converts this waste into materials for packaging and furniture applications.

Read our profile of Craste to learn more about how they’re building sustainable packaging from crop waste.

The report also examines how Techstars founders are using the latest advancements in A.I., machine learning and Big Data processing to conduct supply chain mapping and analyze that data in real-time to improve traceability. We will examine these innovative developments in a future article. 

But you don’t have to wait. Download the Techstars Sustainable Supply Chain Innovation Report to learn how you can measure emissions, model climate risk, estimate product impact and trace materials from source to consumer in order to make substantial progress to your Environmental, Social, and Corporate Governance (ESG) goals.