Expect a swing toward social sustainability in 2021

A critical focus on supply chain sustainability began in the 1990s, according to the MIT Center for Transportation & Logistics (CTL) and Council of Supply Chain Management Professionals (CSCMP). In 2010, the UN Global Compact defined supply chain sustainability as “the management of environmental, social, and economic impacts, and the encouragement of good governance practices, throughout the lifecycles of goods and services.”

As sustainability initiatives were continuing to gain momentum at the start of 2020, by some accounts the COVID-19 pandemic slowed progress; 60% of companies decreased their investment in sustainability initiatives, according to Spend Matters.

Yet, Supply & Demand Chain Executive (SDCE) also said its 2020 Green Supply Chain award-winning companies like CJ Logistics America made sustainability a priority in a time of crisis as the supply chain industry persevered through the disruptions of the COVID-19 pandemic.

The changing priorities of businesses and consumers resulting from the pandemic have had and will have an impact on supply chain sustainability. Consumers and key stakeholders now expect sustainable practices and operations, as SDCE and other sources remind us.

There appears to be a swing from environmental sustainability – managing climate change, harnessing renewable energy and reducing waste management – toward social sustainability, according to industry observers.

The findings of “The State of Supply Chain Sustainability 2020 Report,” published by the MIT Center for Transportation & Logistics (CTL) and Council of Supply Chain Management Professionals (CSCMP), indicate that in 2021 “sustainability engagement may shift toward better health and safety practices, job benefits, and increased pay as a reaction to the myriad headlines about the mistreatment of front-line supply chain workers during COVID-19.”

Another factor influencing the shift is the higher profile of ESG (Environmental, Social and Corporate Governance) investing. A Bloomberg article in SupplyChainBrain, “Biodiversity, Supply Chain Rank Among Biggest ESG Themes in 2021,” reports that ESG investing has moved to the mainstream of finance, along with many social issues such as racial disparities, worker wellbeing in the workplace, and access to health care.

According to Bloomberg, in 2021 investors intend to increase pressure on companies to “address racial and gender diversity, as well as climate change.” Investors say they will be asking companies to “provide greater visibility into their operations related to labor practices, health and safety, and human rights.” Responding, companies say they will become more socially conscious.

In CSCMP Supply Chain Quarterly, Pierre-Francois Thaler, co-CEO and co-founder of EcoVadis, writes that social purpose as central to business commitments is one of the major trends indicating that supply chain sustainability will be a significant focus in the 2020s.

The MIT CTL/CSCMP report reinforces the emphasis on social sustainability and on corporate transparency. “The pandemic may drive efforts toward more purpose-driven supply chains that value social and environmental impacts more significantly,” the report concluded.

As DSC Logistics, long recognized for efforts in sustainability, rebrands as CJ Logistics in 2021, there is excitement about what becoming one with “CJ Logistics, The SCM Innovator” means for the company’s commitment to sustainability. “Now, as CJ Logistics, our ability to optimize sustainability, efficiency and visibility is greatly increased,” CJLA CEO Ed Bowersox said. “Social responsibility – at both local and global community levels – is a key component of CJ Logistics’ strong, value-driven sustainability policy, along with quality workplace and environmental efforts.”

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