Why A Sustainable Supply Chain Is Vital To Business Success
In the current business landscape, profitability is coupled with sustainable practices. Major companies are investing heavily in Environmental, Social, and Corporate Governance (ESG) principles to meet growing consumer demand for ethical brands. Evidence of this trend is Stanford University’s new Doerr School of Sustainability.
The focus on ESG and sustainability, especially in supply chains, has become crucial due to ethical concerns, such as the exploitation in Bangladesh’s textile industry. Ethical considerations are not only morally correct but also advantageous for businesses. Brands are evaluated on their social responsibility and environmental stance, making it imperative for startups to incorporate ethical practices and environmental certifications from the onset.
Sustainability has transcended being a trust factor to becoming a prerequisite for business engagements. The Dow Jones Sustainability World Index suggests that high-performing companies prioritize sustainability. To establish business relationships, companies are required to meet specific sustainability criteria. This shift is catalyzed by corporations adopting the United Nations’ 17 Sustainable Development Goals, with supply chains identified as the biggest challenge.
Entities like Goldman Sachs emphasize the integration of sustainability, social responsibility, and business objectives, inspiring many companies to aim for B Corporation status. Consequently, major corporations’ sustainability standards are dictating changes in smaller companies and influencing investment decisions. Therefore, while conforming to clients’ sustainability standards, businesses should enforce these norms among their own suppliers, contributing to a global shift towards a more sustainable and equitable world.