Supply Chain Sustainability Contributed to Resilience during the Pandemic, Report Finds

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As the pandemic played out around the world, sustainability — far from taking a backseat — increased in prominence. In fact, respondents to a survey conducted for the annual Sustainable Procurement Barometer showed that a significant majority believed sustainability contributed to resilience and helped them endure the Covid-19 crisis.

Executives are increasingly recognizing the business benefits of their companies’ sustainable practices, according to the new report from Ecovadis and Stanford Graduate School of Business. However, while supply chain objectives relating to the environment may have been reconfirmed, ways of achieving them remains a significant challenge for many companies.

But one thing is clear, the report states: sustainable procurement is not something that should be done after processes to run your supply chain efficiently are in place. “Rather, these practices are integral to managing a supply chain effectively and should now be essential practices of supply chain management,” says Hau L. Lee, a professor of operations, information and technology at Stanford Graduate School of Business.

Past Sustainable Procurement Barometer reports have indicated that, in the years leading up to 2020, there has been dramatic progress in sustainable procurement, with hundreds of global leaders scaling up their programs. But the trend has accelerated, this year’s report finds:

• Sustainability contributes to resilience, with 63% of buyers and 71% of suppliers stating that it helped them during the pandemic;
• Delivering on corporate sustainability goals has shifted to the top of the agenda for executive teams, with 63% saying it is now “very important,” compared with 25% two years ago;
• Reducing costs has fallen in significance, with 36% saying it is critically important, compared with 56% in 2019;
• Mid-size companies are solidly in the sustainable procurement game; though they typically use fewer tools due to their limited resources, the benefits they realize are comparable to large enterprises.

Interestingly, while just 7% of companies say they decreased their commitment to sustainable procurement during the pandemic, nearly half of suppliers (46%) see the commitment from their largest customers as “important only on paper.”