Top 10: Sustainable Supply Chain Strategies

For companies all around the world, supply chain sustainability is now a primary concern, with many organisations committed to achieving net zero by 2050.

In fact, Deloitte suggests that around 70% of corporate emissions are Scope 3 emissions (those which occur up and down a company’s supply chain). Therefore, it’s incredibly important for business leaders to address these emissions with a supply chain strategy.

It’s important to remember that sustainability is about more than just emissions too. Reducing waste, conserving resources and empowering suppliers are also very important to modern sustainable businesses and a green supply chain strategy should also take all these things into account.

So, today we’re spotlighting 10 of our favourite sustainable supply chain strategies, exploring the ways modern companies are innovating and investing in sustainable solutions.

10. Circular packaging 

Key companies: Diageo

Main benefits: Reduction in plastic production

As one of the world’s largest beverage companies, British organisation Diageo is responsible for huge amounts of packaging, but they are proactively reducing the plastic footprint of their brands. One of its most beloved products, Irish stout Guinness, is now entirely packaged without plastic. 

Instead of traditional plastic ring packs, cans of Guinness are now held together by glue, or packaged in biodegradable or recyclable cardboard. Diageo has also removed plastic shrink-wrapping from the supply chain of all its beer products in further efforts to minimise waste. 

This strategy takes the onus to act sustainably away from consumers, instead delivering sustainable solutions from the top down. Oliver Loomes, Country Director of Diageo Ireland, says: “Managing our environmental impact is important for the planet and the financial sustainability of our business”.

9. Sustainable sourcing

Key companies: Nestlé

Main benefits: Improved social and environmental sustainability

With a portfolio of over 2000 brands, it’s easy to understand why Nestlé relies on farmers from dozens of countries when sourcing the many ingredients they need to create its products.

Managing a vast global supply chain sustainably can be challenging, but Nestlé says it is determined to source 100% of its produce “responsibly” by 2030. To the food and drink giant, responsible sourcing means “considering farming practices, their impacts on forests and natural ecosystems, and the extent to which human rights and animal welfare are respected by growers and suppliers.”

Two of the company's biggest ingredients – coffee and cocoa – are already sourced entirely sustainably.

Now, Nestlé is turning its attention to its many other supply chains.

8. Renewable energy in operations

Key companies: Walmart

Main benefits: Reductions in Scope 1 & 2 emissions

Walmart, the world’s largest supermarket chain, is aiming to power 50% of its operations with renewable energy by 2025. The company already has more than 600 renewable energy projects across multiple countries and has signed agreements for over five billion kWh of wind power annually. 

These initiatives have helped Walmart avoid over 2.3 million metric tonnes of CO2e emissions in energy consumption. Moreover, the Walmart team is aiming to increase the company’s solar capacity by 1000% by 2030, with an eye to all business operations being renewably fuelled by 2035.

Despite these positive developments, Walmart’s most recent carbon report (from 2022) showed that its annual Scope 1 emissions were the highest that they have been in almost a decade.

7. Sustainable transportation

Key companies: IKEA

Main benefits: Reduced greenhouse gas emissions

Home furnishing kingpin IKEA has offered a delivery service for several years now, but in a bid to decarbonise its supply chain the Swedish business is now in the process of phasing out huge swathes of its gas-guzzling delivery vehicles. 

In Shanghai, all IKEA deliveries already use electric vehicles, saving over 300,000kg of CO2 emissions annually. The plan is to bring this same service to hundreds of other major cities by 2025. IKEA also plans to optimise delivery routes to reduce the fuel consumption of the ICE vehicles that remain in its fleet.

6. Water conservation

Key companies: PepsiCo

Main benefits: Preventing water scarcity

Soft drink manufacturer PepsiCo is looking to significantly soften its impact on global water reserves in the near future. As a part of its “Positive Water Impact” strategy, PepsiCo has set out its aims to replenish more water than it uses in high water-risk areas by 2030.

PepsiCo understands the importance of preventing water scarcity, after all, its operations rely entirely on healthy global water reserves. With that idea as its guiding star, the American beverage giant has improved its water-use efficiency by 15% since 2015.

Overall, its CSR and ESG efforts have helped provide safe water access to just under 70 million people.

5. Sustainable packaging innovation

Key companies: Procter & Gamble

Main benefits: Reduced waste

Removing unnecessary plastic waste from supply chains is one of the biggest challenges facing businesses today, and Procter & Gamble, the largest consumer goods company in the US, takes its stewardship obligations for plastics packaging seriously.

Currently, P&G is developing innovative sustainable packaging solutions including its first paper bottle for Lenor fabric softener. The company aims to make 100% of its packaging recyclable or reusable by 2030, entirely removing single-use plastics from its supply chain.

Removing waste from the supply chain with smart design choices is a key part of P&G’s sustainability strategy: “We are guided by science and life cycle thinking – recognising the need to look at life cycle impacts of material choices to help inform our design decisions.”

4. Supplier engagement

Key companies: Apple

Main benefits: Skill sharing, investment in renewables

Apple's “Supplier Clean Energy Program” was launched in 2015 with the aim of reducing the carbon footprint of its global supply chain, simply by encouraging and supporting its suppliers to transition to renewable energy sources.

Since then, it has helped over 200 suppliers transition to 100% renewable electricity, removing 13.9 million tonnes of CO2 from Apple’s supply chain. As a supplement to the financial support, Apple also provides training and resources to its suppliers on the topics of energy efficiency and waste reduction.

3. Zero waste to landfill

Key companies: Toyota

Main benefits: Reduced waste, increased recycling

Toyota has been around since the late 1930s and for much of its history it has been obsessed with sustainability. In the 1970s, Toyota constructed a zero-pollution waste disposal facility next to one of its factories to create “the cleanest vehicle manufacturing environment in the world.”

In the intervening years, Toyota has introduced on-site biogas generation and water treatment programmes, as well as a company-wide waste management campaign.

This campaign has seen the Japanese motoring company divert over 1.5 million tonnes of waste away from landfill and into recycling plants. From the start, the initiative has been rigorous, including recycling programmes for everything from cardboard to cafeteria waste.

2. Sustainable product design

Key companies: Philips

Main benefits: Lower retail and production costs, increasing product lifespan

Philips, the Dutch home and medical appliances company, has implemented a sustainable product design strategy, aiming to generate 25% of its revenue from refurbished products by 2025.

Philips has launched a campaign named Better Than New, promoting all the benefits of refurbishment, from lower costs to less waste. This campaign is made possible by the smart product design choices, making items easy to disassemble and new components easy to install. 

Philips’ medical imaging systems, for example, are designed with materials that are 90% recoverable, meaning that these expensive pieces of equipment have far longer lifespans. This approach has led to a 7% reduction in product carbon footprint since 2015, with further reductions expected as refurbed products are rolled out globally.

1. Blockchain

Key companies: IBM

Main benefits: Increased supply chain transparency in seconds, versatility, increased efficiency

If you’re attuned to the worlds of finance and technology, you’ll probably have heard a lot about blockchain in recent years, but if you’re not, blockchain can be a confusing concept.

Essentially, blockchain is a method of tracking transactions of money, products – pretty much anything – with the use of advanced databases. If Vendor A sells Product B to Buyer C, blockchain will record each step in the supply chain, as its name suggests.

Furthermore, if Buyer C then decides to sell Product B to Buyer D, blockchain will track that transaction too, making the provenance of goods and services completely transparent.

IBM is a market leader in blockchain technologies, and has developed a blockchain-based supply chain platform that enhances transparency and traceability across complex global networks. 

The IBM Food Trust initiative, for instance, allows food products to be traced from farm to store in seconds rather than days. This system has been adopted by major retailers like Walmart and Carrefour, improving food safety and reducing waste. 

Thanks to IBM, Walmart can now trace the origin of sliced mangoes in 2.2 seconds, compared to nearly seven days previously. The platform has also helped reduce food waste by up to 30% in pilot projects by enabling more precise inventory management.

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