16.08.2016  |  Supply chain

The state of sustainable supply chains

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Today’s complex supply chains require transparency and collaboration to manage business risks and bring value to stakeholders

Supply chains present complex challenges to businesses globally. Business, in collaboration with suppliers, peers, governments, communities, academia and non-profit organizations, are learning how to address these challenges and investing in building resilient and responsible supply chains. EY worked with the UN Global Compact to explore how companies are embedding sustainability in their supply chains by managing risks and adopting corporate commitments to human rights, ethics, the environment and the communities from which they source goods and services. This report echoes the voices of more than 100 sustainability, supply chain and procurement specialists from 70 companies globally. The report offers market practices from different geographies, sectors and business models. Despite the difference in governance structures, approaches and sophistication in dealing with supply chain challenges among the companies participating in the study, several common themes emerged:
 

Shared commitment

  • Leading companies are creating shared commitments with their suppliers toward sustainable supply chains.
  • In addition to establishing and communicating supplier expectations, monitoring and auditing supplier performance, companies are investing in supplier engagement, capacity building and incentives to promote continuous improvement and common business goals.

Collaboration

  • Collaboration across functions with peers, non-profit organizations and academia is critical for addressing the complex supply chain challenges.
  • Significant progress toward more responsible and resilient supply chains has been achieved through collaborative initiatives by sector, helping companies reduce management costs and supplier fatigue while leveraging the combined power of all partners.

Technology as a transparency enabler

  • Stakeholders are increasingly expecting companies to disclose their supply chain risks, including regulatory, reputational and business continuity risks.
  • Increased transparency in supply chain management is becoming the norm; however, the task of understanding supplier practices and performance beyond Tier 1 suppliers is still a challenge.
  • Technology solutions and innovations enable companies to increase transparency deeper in the supply chain and protect their brands, meeting stakeholder requirements while reducing compliance and supply chain management costs.


The results of the study show that leading companies are deriving numerous business benefits from embedding sustainability in their supply chains. These benefits include product differentiation, increasing market share and growing consumer support. We are grateful to the supply chain, procurement and sustainability professionals from various geographies and sectors who shared their practical experience, challenges and learnings in creating responsible and resilient supply chains.

We are proud to have teamed with the UN Global Compact for this study. As a signatory of the UN Global Compact, EY has pledged to adopt sustainable, socially responsible policies and practices across our value chain. We believe the UN Global Compact Ten Principles align closely with our own purpose of building a better working world. By fulfilling this purpose, we leave a lasting legacy for our clients, our people and society as a whole.

We hope that this report helps your company identify business opportunities, useful approaches and tools, and provides the inspiration to promote sustainability across your value chains.

Mathew Nelson
Global Climate Change and Sustainability Services Leader, EY

This report was produced by EY in association with the UN Global Compact. The data and information included is compiled from interviews conducted with 70 companies.

Read the report by the attached file.

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