Sustainability Is the Supply Chain Issue Nobody’s Talking About
Detrimental practices have become the norm despite stated brand values
This piece was originally published by Adweek.
As supply chain challenges dominate global headlines, it strikes me that the absolute impact a brand’s supply chain has on the consumer experience has been radically underestimated, underreported, and under scrutinized. The bulk of today’s news focuses on low supply, shipping delays, rising costs, worker shortages and the case for automation. Little attention is paid to how a brand’s supply chain, the invisible backbone of a consumer goods business, truly manifests a brand’s core purpose.
Given how much attention we pay to the growing power a brand’s values play in consumer decision making and loyalty, it is surprising that marketers and executives rarely move topics of customer engagement beyond the well-worn topics du jour: “omnichannel strategy,” “end- to-end customer service,” or “enterprise-wide ESG.” All of these initiatives rely on the seemingly banal, but critical supply chain process—arguably the most profound articulation of a brand’s mission.
Dispel the myth that speed is everything to consumers
Many brands speak to corporate values in broad terms but fall short delivering on them tactically. Companies that choose fast delivery and low-cost materials over a more sustainable supply chain are betting on the false narrative that consumers prioritize convenience and price above all. Amazon has certainly upped the instant gratification ante, but this is a precarious growth model. Consumers may seem focused on on-demand delivery and abundant supply, especially during the competitive holiday season, but grave environmental implications will outweigh convenience. An EY study earlier this year found that 84 percent of consumers feel sustainability is important when making purchase decisions, and 61 percent want more information to help make more sustainable choices.
Emissions from road-based travel and transport are an alarming 70 percent higher than they were at the beginning of the millennium. This is primarily due to the proliferation of fuel-hungry vehicles like SUVs and increased shipping through vendors like Amazon. In fact, the Amazon last-mile delivery model can result in up to 35 times more greenhouse gas emissions than a fully loaded delivery truck. Amazon’s own sustainability report demonstrated a 19 percent rise in carbon emissions in 2020. As the effects of climate change become even more conspicuous, this transport model will become deeply scrutinized, likely losing favor with consumers—and the brands that have not aligned their supply chain practices with environmental values may struggle as a result. Conversely, brands that are early and committed adopters of a green supply chain will have an upper hand.
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Pursue unwavering supply chain transparency
Brands’ supply chains are responsible for 90 percent of their ecological footprint. Therefore, any brand that publicly states or markets a commitment to the environment must address its supply chain. This encompasses supply procurement, packing and shipping, and last-mile delivery—all services that are usually sourced through third-party service suppliers. Yet, these blindspots are common. In a report released last month, fewer than 50% of companies surveyed had visibility into their Tier 1 suppliers and only 2% had visibility beyond their second tier of suppliers.
Industrial-level culture change begins when brands actively and publicly seek partners with an ecological commitment that matches their own. Companies like Timberland, for example, may do a good job of reducing in-house emissions. However, if the company’s suppliers and partners do not mirror these same efforts and values, Timberland’s own in-house efforts could appear performative or superficial.
In contrast, Starbucks has claimed 99 percent of its coffee is ethically sourced since 2015. To get there, Starbucks built a supply chain with suppliers that met specific and high sustainability standards. This required employing third-party auditors to uphold CAFÉ Practices or Fair Trade standards for agriculture practices, emission levels, labor policies, and more. Starbucks committed to long term partnerships with its suppliers, understanding that continuing to buy from these suppliers made it fiscally possible for it to pursue higher sustainability standards.
Create a branded supply chain
When a business truly understands and owns a values-driven supply chain, a powerful story unfolds. Brands are able to not only communicate, but demonstrate how they prioritize sustainability. They can humanize and contextualize the challenge in a manner that reinforces how brands’ and consumers’ values align.
Impossible, the plant-based food company, is able to track the minimal ecological footprint of its products compared to real meat and shares this data with consumers through an impact calculator. Clothing retailers like Ecologyst can create constant touchpoints with consumers with their offer to mend any wear and tear as a means to reduce waste. Athleisure challenger brand Girlfriend Collective says its high-performance clothing made from recycled water bottles take longer to arrive because they purposefully choose shipping methods that reduce carbon emissions.
It is through a brand’s supply chain that its values are tested, its priorities are laid bare, and its environmental impact is exposed. Brands must choose to invest in building a supply chain that inspires loyalty now or lose time, and face, playing catch up later.
CEO, Long Dash