While geopolitical shifts and economic uncertainty have impacted businesses around the world, some 85% of firms are continuing to maintain sustainability practices in their supply chain at the same level – or greater – than in recent years, a new MIT study has found.
The study, Sustainability Still Matters, was undertaken by the MIT Sustainable Supply Chain Lab in collaboration with the Council of Supply Chain Management Professionals, and drew on responses from 1,203 professionals across 97 countries.
‘Strong willingness’
“What we found is strong evidence that sustainability still matters,” commented Josué Velázquez Martínez, a research scientist and director of the MIT Sustainable Supply Chain Lab, which helped produce the report. “There are many things that remain to be done to accomplish those goals, but there’s a strong willingness from companies in all parts of the world to do something about sustainability.”
The study analysed three specific areas in depth – regulation, emissions measurement (particularly in terms of Scope 3), and freight transportation.
It found that the main driver of sustainability activity varies from region to region – in Europe, the principal driver of action tends to be regulation, such as the Corporate Sustainability Reporting Directive (CSRD), which requires regular reporting on firms’ environmental impact. In North America, however, investor expectations and leadership decisions are likely to play a greater role.
“In Europe the pressure primarily comes more from regulation, but in the US it comes more from investors, or from competitors,” Velázquez Martínez added.
Scope 3 challenge
In terms of emissions, around two fifths of firms surveyed said that they keep close track of their Scope 1 and 2 emissions, but tracking Scope 3 emissions, which account for the majority of a business’ total emissions, remain a persistent challenge.
Some 70% of respondents said that they do not have enough data from suppliers to tabulate the total greenhouse gas and climate impact of their supply chains.
In addition, many firms are still relying on basic tools to measure their emissions, with half of North American firms still using spreadsheets for carbon accounting, along with one-third (32%) of European firms, rather than more accurate life cycle assessment tools.
“You get what you measure,” Velázquez Martínez added. “If you measure poorly, you’re going to get poor decisions that most likely won’t drive the reductions you’re expecting. So we pay a lot of attention to that particular issue, which is decisive to defining an action plan. Firms pay a lot of attention to metrics in their financials, but in sustainability they’re often using simplistic measurements.”
Transportation emissions remain another key area of focus, with firms utilising a variety of pathways to decarbonisation, the study found. These include the use of biofuels, electric vehicles, and hydrogen-powered fleets. Read more here.
