MIT: Assessing the State of Supply Chain Sustainability

The MIT Sustainable Supply Chain Lab and the Council of Supply Chain Management Professionals (CSCMP) have collaborated on a report examining how companies are transforming their supply chains to make them more sustainable. 

The report examines trends across regions and industries, as well as the numerous obstacles businesses are facing.

MIT goes on to offer valuable examples of how embedding sustainability can help businesses around the world increase efficiency and resilience.

Supply chain experts

Now in its sixth year, the State of Supply Chain Sustainability Report gathers insight from more than 1,200 professionals across 97 countries. It sees professionals across supply chain, procurement, operations, logistics and sustainability offering data from their business strategies. 

Produced at the MIT Center for Transportation and Logistics (MIT CTL) and sponsored by C.H. Robinson, it examines how supply chains and trade are shifting as a result of regulation, Scope 3 emissions pressures and technology. 

At a high level, the study discovers businesses are moving forward with sustainability strategies, despite regulations currently being unpredictable. 

This is mostly being driven by investor expectations, customer demand and long-term profitability. Businesses openly discussing their sustainability measures carries the potential to enhance their reputation among consumers. 

“Sustainability is profitable,” asserts Dr. Josue Velázquez Martínez, Director of the MIT Sustainable Supply Chain Lab at the MIT Center for Transportation and Logistics (CTL).

“Forward-looking companies understand that investments in sustainability are not only about compliance or reputation—they’re about long-term business viability and resilience.”

Report findings

Sustainability policy has changed on a regular basis in recent years, with regulations being put in place only to be rolled back shortly after. As a result, companies are unaware of the expectations surrounding their performance and supply chains are constantly being reshaped. 

Despite this, many companies are still working to implement emissions reduction strategies into their operations. The report suggests there is a bigger push towards sustainability in the European market than in North America, with three in five (60%) businesses in Europe saying they feel pressured to enhance sustainability, as opposed to 46% in North America.

In Europe, the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards are encouraging businesses to standardise disclosures and improve data governance. In the US, pressure typically comes from investors, boards and C-suites instead of governmental regulations.

“European companies are under intense pressure to comply with disclosure requirements and that is cascading through their supply chains,” said Dr. Sreedevi Rajagopalan, a Research Scientist at MIT CTL.

“Global suppliers increasingly have no choice but to provide accurate data and work with buyers to reduce Scope 3 emissions.”

Help and hindrance 

Tracking

Companies are under growing pressure to report their emissions, and though many are becoming skilled at tracking and reducing Scope 1 and 2, Scope 3 emissions are still vastly unreported – even though it accounts for more than 75% of a company's total footprint.

Part of the struggle is that companies are using outdated tracking tools – 79% businesses use spreadsheets as a primary tool. This raises risks of data quality, auditability and scalability.

Transportation

As one of the biggest Scope 3 categories, transportation can be both a barrier and an opportunity, depending on how businesses adapt.

“Some firms are betting on biofuels now, others on electric or hydrogen in the future,” Josue explains.

“But waiting too long to act is risky. There are efficiency measures – like route optimisation and fuel management – that can cut emissions and costs today.”

Collaboration

Many of the issues come from a lack of resources, but when collaboration occurs, new advantages are unlocked for these businesses.

Through collaboration, businesses find 

• improved emissions data
• better supplier alignment
• shared expertise
• cost savings
• policy influence 

While unlikely there will ever be uniformity across regions or industries, the MIT report does point towards shared goals.

Through adopting innovative tools, collaborating and strengthening supplier partnerships, companies can enjoy new levels of growth, resilience and efficiency while meeting climate goals.