Sustainability measurements lacking, says EY survey

EY survey of supply chain leaders reveals need both for visibility on sustainability performance and a holistic business case to drive results

An EY survey into sustainable supply chain practices shows that although many C-suite executives have long-term strategies, many struggle to measure their progress.

Multinational professional services company EY interviewed 525 executives, and found that business case initiatives for sustainability go beyond cost savings, to cover increased revenue, customer loyalty and share price protection.

The survey also found that supply chains are “sustainability’s new frontier”, being the “core activators” for enterprise-wide sustainability goals and commitments. 

EY says supply chain executives are forging ahead on sustainability, but that to reap long-term benefits, companies must set science-based targets and then work towards these.

The survey saw EY approach large corporations across Argentina, Brazil, Canada, Mexico and the United States. Sectors included retail, consumer packaged goods, health providers, life sciences, government, technology, energy, manufacturing, mobility, and food and agriculture.

The research shows that while many executives have long-term sustainability goals for their supply chains, few have the visibility, technology and comprehensive programs in place to measure their progress. 

    Look beyond compliance to other sustainability benefits - EY

    Beyond risk avoidance and compliance, organisations are also looking for ways to create long-term value, by embedding sustainability into supply chain operations.

    Barriers to progress on sustainability include upfront costs and a lack of a clear business case to support expenditure.

    EY found that eight in 10 supply chain executives are increasing their efforts toward sustainable supply chain operations. 

    The survey reports that they are working toward the efficient use of natural resources, decarbonisation, ethical sourcing and fair trade as part of their larger focus on ESG initiatives. 

    EY also says supply chain leaders are also looking to reduce risk, increase innovation and generate a stronger return on investment for their sustainable supply chain initiatives.

    EY experts advise that companies “play the long game but start their supply chain sustainability initiatives immediately”, and offers the following strategies to get started:

    • Prioritise efforts by determining how sustainable supply chains fit into your organisational-wide commitments and goals. 
    • Deploy tech capabilities to help improve supplier engagement. 
    • Expand ROI measurement to include sustainability outcomes.
    • Consider business-case drivers beyond cost savings (revenue, market share, reduced risk and improved customer and employee loyalty).
    • Move beyond a sourcing and procurement focus to capture benefits across the end-to-end supply chain. 
    • Leverage available tax incentives and grants.
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