Risk management is one of those key areas that factors into these plans. Companies can protect themselves from potential supply chain interruptions associated with suppliers’ practices, such as labor standards and anti-corruption guidelines, by enforcing contracts, verifying that the defined stipulations in each area of procurement are being followed, and addressing any shortfalls in meeting those contractual agreements if they arise. This can also reduce the risk of a public relations quagmire. Improving productivity through innovation and collaboration, through more active communication between the intricate web of the inter-connected supply chain players, can lead to lower procurement costs and less strain on the environment. Incorporating these and other pro-active strategies can help companies achieve a competitive advantage and generate new products or services that are available in the market.
So, how have organizations incorporated the UN’s specific SDGs into their supply chain activities?
Different organizations and NGOs look at the supply chain relevance from their individual vantage point. International Labour Organization (ILO) 6, for example, focuses on Goals 8, 9, 16 and 17. The common theme for them is the impact on Least Developed Countries (LDCs) – and, rightly so. There is, however, some convergence on addressing the business supply chain focus, SDG Goal 12: Responsible Consumption and Production. This goal focuses on promoting resource and energy efficiency, sustainable infrastructure, providing access to basic services, green and decent jobs and a better quality of life for all.7 Here are a couple of examples of companies putting those goals into their day-to-day business practices:
- Brambles is an Australian global supply chain logistics company with revenue of about $5B. It recently announced its 2020 Sustainability Goals in alignment with the UNS’s SDGs. Their goal is for yearly improvements in their supply chain operations that would reduce carbon emissions and waste specifically in their customers’ supply chains. Brambles provides standardized reusable pallets, crates and containers to customers. Customers then use them to transport goods through their supply chains, and either arrange for its return to Brambles or transfer it to another participant in the network for that participant’s use prior to its return to Brambles.8
- Scania is a Swedish manufacturer of heavy trucks and buses. HAVI Logistics, a global logistics provider for the food industry, is using Scania’s new generation of trucks and vehicles that run on alternative fuels, such as the gas and hybrid models for transportation associated with McDonald’s restaurants in several European countries. While delivering supplies to the restaurants, special equipment on the trucks is used to collect waste for recycling, further reducing their CO2 emissions impact.9
Many corporate leaders now recognize that the percentage of consumers who prefer, are aware of, and are loyal to those companies who deliver eco-friendly offerings continues to increase.10 KPMG 11 reports that 43% of the global 250 (referencing 250 of the largest companies in the Fortune Global 500, headquartered in 31 countries) have linked their sustainability activities with SDGs. But, why, despite profitable and persuasive business case examples, has the commitment to implement more SDGs been, at best, lukewarm and still considered a “soft”, non-essential component of corporate strategies? Perhaps it’s because companies are not approaching the SDGs as potential drivers to meet or exceed their corporate financial goals. If the SDGs were better matched and consciously paired with corporate strategies, the correlation between profit and sustainable practices would make for a more convenient, solid and long-term marriage. According to Corporate Citizenship, a global sustainability and business consultancy, “many [businesses] continue to simply conduct a ‘tick-box’ exercise, superficially mapping existing activity against the 17 SDG Goals. Few have embraced the logic and business case behind the Goals, or embedded them into their strategy and operations as a way to support their own long-term growth.”12
While the gaps in connecting SDGs with 21st century business practices are, unfortunately, still frustrating and wide, every day there are more companies that have started the alignment process. I would say that this is promising, and we need to continue to monitor, report on and encourage this alignment and progress.