EY: Tackling Sustainable Supply Chain Transformation

EY is widely recognised as an organisation committed to helping clients increase the value of sustainability and supply chain strategies. 

By managing risk, building trust and improving decision-making in this space, businesses stand to achieve a number of positive results including reduced costs and enhanced operational effectiveness. 

In recent years, there has understandably been a discernible shift at EY towards supporting clients as they harness the power of technology to achieve supply chain sustainability.

Central to this strategy is Sheri Hinish, better known in many quarters as the Supply Chain Queen, who has dedicated her life to transforming global supply chains with a focus on sustainability, innovation and inclusive leadership. 

Now, as a Principal and Global Consulting Sustainability Services, Technology and Ecosystems Leader at EY, she is guiding the world’s biggest brands as they tackle sustainable supply chain transformation and innovation strategies, from operationalising ESG reporting to decarbonising supply chains and fostering circular economy principles. 

Sheri also hosts the acclaimed podcast, Supply Chain Revolution, where she discusses cutting-edge topics in supply chain management, sustainability, innovation and transformative business practices.

“In today’s exceedingly volatile world, companies face mounting pressure to provide greater detail about the sustainability of their supply chains,” Sheri says. “Data and AI play an increasing role in providing the visibility and transparency needed to achieve this.

“We collaborate with clients through a structured approach by addressing key barriers such as climate disruptions, lack of data visibility, siloed decarbonisation efforts, financial constraints, regulatory risks and supplier engagement challenges.”

The changing face of sustainability consultancy

Sheri has worked in sustainability consultancy and thought leadership for a number of years, previously with Blue Yonder, IBM and then EY from 2023. 

Clearly, over the past few years, her specialist field has not only undergone significant changes but come to the fore, driven by various market forces including regulatory pressures, technological advancements and evolving consumer demand for human rights due diligence and social justice. 

Sheri adds: “Companies are now asking for our help to move beyond compliance-focused efforts to a holistic, technology-driven transformation approach, addressing complex challenges and driving substantial benefits in the journey towards net zero by connecting corporate commitments with daily operations. 

“Let’s face it, technologies such as AI, IoT and blockchain have revolutionised how sustainability is operationalised in a trusted and transparent manner, enabling real-time data capture, predictive analytics and enhanced resource efficiency. 

“These changes have shifted the focus from mere compliance to building resilient and adaptable supply chains that can address complex sustainability challenges and meet stakeholder expectations.”

What’s more, the emphasis today is on a comprehensive and strategic transformation of the entire supply chain ecosystem, which involves strategic decarbonisation across all aspects of the supply chain, from raw materials to sales and distribution. 

Sheri says this includes, but is not limited to:

• Setting decarbonisation targets and establishing functional decarbonisation targets within supply chains

• Identifying, classifying and managing supply chain carbon hotspots

• Designing decarbonisation levers, including not only creating and implementing decarbonisation strategies, but also using trusted and verifiable carbon offsets if necessary

• Activation and execution by empowering and upskilling the workforce and supply chain partners to execute the decarbonisation strategy effectively

• Recognising that sustainability is a team sport. For true enablement, there is a need to accelerate the decarbonisation journey through technology and foster a sustainable ecosystem that includes people and processes.

Overcoming barriers 

Asked what barriers organisations face when it comes to making their supply chains more sustainable, Sheri lists several – and it sounds like she could continue reeling them off. 

One of the more obvious hurdles she highlights is difficulty in predicting and planning for climate change impacts, while a lack of real-time visibility, quantification and data lineage across different systems and functions invariably hinders effective decision-making and sustainability efforts. 

In addition, decarbonisation efforts are often siloed and isolated, with suppliers either unwilling or unable to engage at the required pace and scale. Sheri notes that companies must effectively manage and engage their supplier networks in order to ensure ESG commitments are aligned. 

Then there’s the host of financial barriers, complexities that come with regulatory and compliance obligations and pressure to demonstrate business value to justify sustainability investments in what is a challenging economy. 

Focusing on the issue of product innovation and circularity, Sheri says: “There are rising expectations to produce sustainable products and comply with regulatory requirements.

“Companies also experience challenges in demonstrating and sharing life cycle assessment data of material flows. They need to be investing in product data transparency, innovation and redesign to meet shifting consumer preferences and regulatory requirements for sustainable products.”

Meanwhile, when it comes to social and community impact, Sheri says firms must achieve a social licence to operate.

“This means effective integration of diversity, equity and inclusion (DEI) and ESG strategies and overcoming challenges with regional or local certification processes, supplier identification and programme structures,” she adds.

“In summary, these barriers reflect the complexities and multifaceted nature of implementing sustainable practices within supply chains, requiring comprehensive strategies and continuous improvement efforts.”

However, EY is evidently in the business of solving problems and breaking down these barriers, no matter how obstructive they may seem. 

The consulting powerhouse offers solutions across five key areas to help clients address supply chain sustainability challenges: 

1.    Journey to Net Zero People and Planet Supply Chains   

   -    Disruptions from climate change

   -    Data visibility issues

   -    Financial challenges

2.    Supplier Transformation  

   -    Compliance and regulatory risks

   -    Supplier network visibility

   -    ESG integration

3.    Sustainable Products & Circularity

   -    Public and regulatory pressure

   -    Lifecycle data management

   -    Circular economy implementation

4.    Sustainable Supply Chain Architecture, Due Diligence & Tax Optimisation

   -    Energy and environmental taxes

   -    Transparency demands

   -    Sustainability integration

5.    Community Impact & Supplier Diversity

   -    Siloed efforts

   -    Data visibility and metrics

   -    Regional complexities

“Using our comprehensive solutions, we’ve helped clients in areas such as net zero target advancement – moving towards net zero with significant annual reductions,” Sheri explains. 

“We’ve supported them with certainty in planning by providing clarity on short to medium-term glide paths and investments.

“And we’ve helped them in advancing equity and the people imperative by encouraging mindset shifts and engaging employees and suppliers in the sustainability journey.

“Finally, we’ve encouraged organisations to look ahead and future-proof supply chains with holistic frameworks, creating a roadmap for achieving net-zero targets while reducing risks, costs and volatility tied to regulatory and climate-related disruptions.”

EY’s holistic solutions represent leading strategies across five key areas and help provide compliance with CSRD, CSDDD, FSMA and many more emerging regulations.

Here, Sheri explains these solutions in greater detail. 

  1. Journey to Net Zero People and Planet Supply Chains

“We help clients set decarbonisation targets, identify carbon hotspots, design and execute strategies and leverage technology for ecosystem enablement. This includes operational decarbonisation across raw materials, logistics, manufacturing, assets, sales and distribution.”

  2. Supplier Transformation

“Our services optimise procurement functions for sustainability, establishing supplier expectations aligned with ESG goals. We integrate sustainable elements into category strategies, deploy technological capabilities for visibility and embed real-time risk management into tech systems.”

  3. Sustainable Products & Circularity

“We assess product portfolios and lifecycle management for sustainability and circularity. This involves measuring performance on waste, raw materials, packaging and emissions, investing in product data transparency and innovation and developing circular business models.”

  4. Sustainable Supply Chain Architecture, Due Diligence & Tax Optimisation

“We embed sustainability, resilience and visibility into supply chain strategies for cost optimisation and growth. This includes monitoring sustainability tax and regulatory policies, integrating dynamic policies, modelling potential business impacts and engaging policymakers.”

  5. Community Impact & Supplier Diversity

“We drive positive community and social outcomes through enhanced diversity and inclusivity. This involves connecting supplier diversity programs to business strategies, embedding diversity in supplier relationships, proactively developing diverse suppliers and targeting engagement strategies. To help clients advance their maturity from compliance and optimisation to transformation, we leverage advanced technologies and strategic alliances that provide comprehensive solutions like the EY-Microsoft Net Zero Transformation Platform, as well as advances in generative AI (Gen AI) via our EY.ai platform.”

Data ‘the connective tissue’ across value chains

As discussed, harnessing the power of technology is absolutely pivotal to achieving enhanced levels of supply chain sustainability.

Sheri and EY emphasise that a solid, connected and integrated ESG data strategy is foundational to sustainable transformation. 

It’s an approach that improves visibility and readiness for transformation while increasing control and understanding of data elements, thus providing better connectivity, strong compliance and greater consistency in operational success.

“Sustainability data is the connective tissue across value chains,” Sheri enthuses. 

“Fragmentation of processes and systems across an organisation can lead to higher costs, inefficiencies and an inability to measure return on activities and holistically transform. 

“Companies need a trusted and connected view into their ESG-related data and integrated business process across the value chain to inform decisions that will help them build resilience and improve their environmental and social impacts. This requires a multitude of views, the analytics prowess to drive decision-making and solutions to combine fragmented processes into one manageable roadmap. 

“Businesses need a strong partner with functional and technical expertise to simplify a complicated transformation journey.”

Through its wide portfolio of offerings, EY provides enterprise-ready services and solutions across the supply chain sustainability life cycle, each designed to help organisations address the planning and implementation of decarbonisation and ESG strategies.

What’s more, the organisation collaborates with a host of leading technology and data partners, including Microsoft, SAP, ServiceNow and IBM, to provide clients with access to cutting-edge platforms and data solutions, enabling efficient management of sustainability initiatives. 

Through these technologies and alliances, EY empowers clients to enhance visibility, achieve readiness for transformation, secure control over processes and foster understanding of data elements, ensuring strong compliance and operational success in their sustainability journeys.

Sheri says: “Sustainability performance management with EY and our strategic sustainable supply chain alliances usher in a new paradigm of corporate performance management.”

Leveraging emerging technologies

It’s not just plain-old technology, but emerging technologies such as Gen AI and machine learning (ML), which are transforming supply chains into intelligent, autonomous systems.

These game-changing tools enhance predictive capabilities, optimise the design-plan-source-make-deliver process and circular orchestration, and improve decision-making processes with an enhanced ESG lens. 

However, according to EY’s latest research, while almost three-quarters (73%) of supply chain and operations executives are planning to deploy Gen AI, more than three in five (62%) have reassessed projects and only 7% have completed implementation.

Primary implementation challenges, such as a lack of technical talent, data readiness and understanding of Gen AI risks, have made it tougher than expected to make the leap from proof-of-concept to large-scale rollout. 

“Effectively utilising cutting-edge technologies is a critical tool in making supply chains more sustainable and resilient,” Sheri goes on. “AI, ML, advanced analytics and big data can aid planning and forecasting, as well as better predict essential maintenance within supply chains, helping to reduce error rates and operation costs while optimising supply chain flows.

“Our solutions leverage these technologies to provide intelligent ESG insights, enabling clients to gain deeper visibility into their carbon footprints and make more informed strategic decisions tied to net zero targets, with the ability to model financial tradeoffs in CAPEX and OPEX and adapt to regulatory changes and business pressures.”

Addressing Scope 3

Scope 3 emissions are a major focus within EY’s sustainability efforts with clients given they often represent the largest share of a company's carbon footprint.

During the Scope 3 Forum at Sustainability LIVE: Net Zero, staged earlier this year, executives from Clyde & Co, SGS and THG disclosed that their own workplaces’ Scope 3 output accounted for at least 90% of their overall emissions. 

As is well documented, these indirect emissions are challenging to measure and manage due to their extensive nature, covering both upstream and downstream activities.

Moreover, from a regulation perspective, the landscape surrounding Scope 3 is becoming increasingly stringent with new disclosure requirements from organisations like the SEC and International Sustainability Standards Board (ISSB). 

“I want to call out that you can’t emphasise Scope 3 without discussing human rights, too,” says Sheri. “With regulations like EUDR, CSRD and CSDDD, companies are struggling with accurately capturing and reporting data across their entire value chain. 

“Through a comprehensive approach that includes technological integration, regulatory compliance and strategic decarbonisation, EY helps clients address the complexities of managing Scope 3 emissions, achieve their sustainability goals and ensure compliance with evolving regulations. This enables clients to build transparent and sustainable supply chains that meet both regulatory and stakeholder expectations.”

Sheri Hinish is a passionate believer that supply chains can change the world. 

While the Supply Chain Queen’s dedication to doing just that is truly unrelenting – to the point that it verges on being machine-like – she and EY cannot go it alone. 

What’s clear is that integrating sustainability into global supply chains requires a collaborative but pragmatic approach, underpinned by technological innovation, joined-up thinking and genuine desire to make progress.

To read the full story in the magazine click HERE

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