Driving Retail Success by Closing Sustainability Data Gaps in Supply Chains
Retail companies everywhere know that sustainability is a necessity in business today. And yet, a study showed that at the end of 2023, roughly 40 percent of North American senior sourcing managers ignored sustainability in their operations. Furthermore, 37 percent were unaware of sustainability-related legislation impacting their business.
As the business case for sustainability becomes even stronger, C-suite executives are earmarking 2024 as their year for sustainability growth and long-term strategies. Business stakeholders are scrutinizing retailers more than ever on sustainability — including on their supply chains, where there's often less visibility yet potentially higher ESG risks. For example, Scope 3 emissions usually form the majority of a business’s carbon footprint.
However, the challenge remains to balance these commitments and strategies with more immediate operational demands.
The one constant in solutions to these challenges is good data on sustainability risks, factors and practices. Even better, the right supply chain data can empower multiple sustainability goals, especially when companies leverage the intelligent technologies available to capture and analyze this at both scale and depth. The right solution to streamline these tasks can deliver efficiencies, cost savings and over 300 percent return on investment.
Sustainability Data and Economic Benefits
Gathering sustainability data from a supply chain isn’t just about progressing labor rights or environmental goals. It’s also a powerful business strategy that facilitates competitive advantages.
- Identify operational and resource-usage efficiencies, translating to cost savings (e.g., with waste or fuel reduction).
- Improve risk management by spotting the highest ESG risks, directing actions and resources towards these.
- Increase supply chain resilience through better visibility to anticipate, plan for, and act on regional disruption.
- Enhance brand reputation and combat greenwashing concerns. As household names, retailers are often in the firing line for scrutiny. However, concrete data enables brands to evidence progress and back up their sustainability claims.
- Comply with legislation. As new regulations like the US Uyghur Forced Labor Prevention Act and the EU Corporate Sustainability Due Diligence Directive come into play, retailers face increased pressure to demonstrate sustainable practices throughout their supply chains.
It’s becoming clearer that by meeting shoppers' expectations for transparent and ethical practices, retailers can thrive within a highly competitive market, building brand loyalty and driving long-term growth. Studies show that younger consumer groups with years of buying ahead are willing to spend more for sustainable products.
How to Look Deeper Into Your Supply Chain
Understanding the supply chain beyond direct suppliers, and down to individual sites, is both complex and essential. It can be made easier with the following:
- Scalable risk assessment: A risk assessment tool helps businesses scan for the highest ESG issues in their supply chains on a global scale. This allows retailers to prioritize these risks and take action before they become significant issues.
- On-site audits: Investing in tools like ethical trade audits provides a standardized approach to assessing compliance and sustainability standards, increasing transparency with suppliers and identifying ESG risks to address proactively.
- Supplier engagement: Solid relationships with suppliers are essential to understanding the deeper tiers of supply chains. Building a shared commitment, establishing clear expectations, and offering support to reach sustainability goals encourages success through a collaborative approach.
Technological Integration Drives Success
With advanced technologies like supply chain data platforms to capture, consolidate and easily analyze global supplier data, retailers are set to revolutionize their sustainable supply chain management.
The future of retail is all about embracing innovative sustainability practices with technology and transparency. Adopting a data-driven approach to build visibility and powering swift analysis through robust technology allows retailers to remain competitive while meeting many sustainability-related demands and improving supply chain resilience. Now is the time to turn sustainability data from a challenge into a competitive advantage.
Jon Hancock is the CEO of Sedex, the world’s largest data platform for supply chain assessment.
Jon leads Sedex as the company delivers its strategy and mission. As a technology sector professional with over 20 years’ experience in executive leadership, he brings extensive experience in driving high-performing growth strategies for international organizations. He is passionate about the power of technology to improve people’s lives, and the potential of Sedex’s ambitious plans to support this vision.
Jon’s career spans retail banking, consulting and IT-related professional services. Previous roles include Corporate Vice-President at HCL Technologies, Chief Operating Officer at Axon Group and Chief Executive at Electrosonic.
