In supply chain and business management, the concept of sustainability continues to gain significant momentum. Sustainable logistics and supply chains are increasingly being driven by consumer demand, investor and partner requirements, and upcoming ESG regulations, such as those developed to mitigate GHG emissions.

Developing more sustainable supply chains offers a range of opportunities that are reshaping the business landscape. Inevitably, by integrating truly environmentally friendly practices, companies not only reduce their ecological footprint but also incorporate ethical labour practices and responsible sourcing.

However, this shift towards sustainability often leads to other benefits, such as innovation; businesses are compelled to rethink and redesign their processes, sourcing, and logistics, which can lead to revenue growth as innovation and sustainability can positively impact brand reputation, sales, competitiveness and market share, and even stock prices. In a broader sense, sustainable supply chains contribute to the welfare of the communities they touch, ensuring a healthier environment and supporting social Responsibility.



While the transition to sustainable supply chains presents numerous opportunities, significant challenges remain. Historically, supply chains were largely reactive in nature, influenced by a focus on immediate results and short-term efficiencies. This approach was primarily due to the lack of advanced forecasting tools and a limited understanding of the broader impacts of supply chain operations. Businesses prioritized quick responses to market ebbs and flows as well as cost reductions, often at the expense of long-term planning and sustainability.

The absence of robust data analytics and real-time monitoring systems meant that supply chain decisions were often made in response to short-term challenges rather than through proactive strategies. While effective in addressing short-term needs, this reactive mindset overlooked the potential long-term consequences, such as environmental degradation and resource depletion, which are now central priorities in modern supply chain management.

A shift towards more sustainable supply chains entails a profound re-evaluation of long-standing logistics practices, requiring both innovation and a willingness to embrace new methodologies and technologies. Navigating these changes is complex, as companies must balance ESG goals with economic viability, often facing upfront costs and the need for strategic planning for years to come. In addition, the intricacies of global multi- faceted supply networks, with their varying compliance regulations and standards, add layers of complexity.



 Furthermore, monitoring progress is a feat in itself. According to an EY survey conducted on sustainable supply chain approaches, executives from over 500 companies across North and South America, operating in a wide range of sectors, highlighted one of the biggest hurdles of all. Although many planned to integrate sustainability into their supply chains over the long term, they still feel there is still a gap in the implementation tools, such as adequate visibility, advanced traceability technologies, and holistic programs to effectively track their sustainability improvements.

As an end result, many companies, especially smaller ones, struggle with the initial financial investments—and the absence of a definitive business case to justify the ROI. And yet the same EY survey showed that trailblazing businesses have made progress in their sustainable supply chain management strategies. With a razor-sharp focus on transparency and their supply chains’ digital transformation, 25% have already boosted their revenues. Forty-three percent expect to increase their share prices. And up to 50% have noticed improved employee quality of life.

So how do these leading companies do it? It all comes down to viewing supply chains as data, rather than just the actions required to move goods, as per a compelling article written by experts at Nasdaq.


Here is an example, curated from the article, that clearly shows how this can be Possible:

“A T-shirt is a complex set of information about the sourcing of the material, the energy and water used to create it, its transportation etc.. There’s all this data, and if we lift ourselves above the products and see the data of the products, then that visibility becomes the measurement we need to make informed choices. Choices that don't just include the products themselves, but external factors, such as politics and regulation. So if we want to change the world to adapt to different sustainability criteria, like managing carbon emissions, we need to consider the supply chain data that can be captured using the right technology and methodology.

And how can that be achieved? The article explains that this objective is possible by developing digital twins for every product, coupled with the use of distributed ledger technologies to guarantee reliability and trust in the data provided by each stakeholder in the supply chain.

By doing so, companies can establish data points that offer clear visibility at each stage of supply chain processes. The key then lies in determining the types of data that can significantly alter a company’s operations. This approach essentially modernizes the old adage, “What gets measured gets done,” placing a renewed emphasis on the importance of precise and actionable data. In order for supply chains to be considered as information pipelines, the key is for businesses to digitalize their supply chains.



Technology is undoubtedly at the heart of creating ethical and responsible supply chains. Supply Chain Brain describes that once a company has assessed its current sustainability practices, determined its readiness, and secured trustworthy suppliers, it must digitalize its supply chain.

A digitalized supply chain is best achieved with a cloud-based traceability platform that would enable trading partners across an entire supply chain to electronically connect to a business’ operations. This would enable the supply chain infrastructure to adapt and grow in response to evolving consumer needs and variable market trends. At the same time, each stakeholder to:

  • Reduce waste: Digital tools enable better forecasting and demand planning, leading to more efficient use of resources. This reduces overproduction, minimizes waste, and optimizes inventory levels.
  • Audit and reduce GHG emissions: With a traceability platform, companies can more successfully scrutinize the Scope 1, 2, and 3 emissions from both their operations and their upstream/downstream suppliers. Real-time data becomes the foundation for generating less GHG emissions and simplifying reporting to regulatory bodies.
  • Energy efficiency: Automation and smart technologies in digitalized supply chains can lead to more energy-efficient operations. For example, optimizing routes for transportation reduces fuel consumption and implementing smart warehouses can drastically reduce energy usage.
  • Tighter partner collaboration: Digital traceability platforms can facilitate collaboration between different stakeholders in the supply chain, encouraging the sharing of best practices and joint initiatives for more ethical and sustainable sourcing and production.
  • High-performance lifecycle management: Traceability platforms can greatly contribute to more effectively managing the entire lifecycle of a product, from design to disposal, ensuring that each stage is as sustainable as possible and even fostering a circular economy where an entire product or its materials and components are recycled or revalorized. Asset tracking capabilities can also make it easier for companies to carry out their returnable industrial packaging procedures.
  • Eliminate the risks associated with paper-based workflows: Verifying the legitimacy of paper-based records in a supply chain is an unreliable process, prone to fraudulent activities and making it easier for counterfeit goods to enter a supply chain. Digital traceability systems offer robust security measures for increased transparency and faster detection of anomalies.
  • Streamline reporting: By automating data collection and management, a digital supply chain ensures that accurate and up-to-date information is readily available, reducing the time and effort required to compile regulatory compliance reports. Digital records are easier to audit and verify, offering a clear and transparent trail that auditors can easily access and review. This level of efficiency and real-time accuracy in reporting not only simplifies compliance but also positions companies to respond more swiftly to regulatory changes.

Between the pressing need for more sustainable supply chains and ensuring optimal supply chain management performances, businesses stand at a crossroads. The journey toward greener logistics is clear: integrating cutting-edge technology and digitalization supply chains will become more and more urgent for companies to fight climate change and guarantee their long-term economic viability. Would you like to learn more about the state of sustainable supply chains as we end 2023? Check out MIT’s most recent report here.


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