Supply chain and procurement professionals ambitious on sustainability – but struggling to prioritise planet over profit

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Supply chain and procurement professionals have a key role in progressing their organisations’ sustainability agendas. However, 37% say that a habit of prioritising cost above sustainability in decision making is a barrier to them making improvements in this area, while 59% say that it’s easier to focus on cost savings than sustainability.

These are key findings from The sustainability imperative: an agenda for change, a new report from Skill Dynamics, provider of high-impact, digital training for the supply chain and procurement functions. The report is authored in conjunction with Dr Omera Khan who is Executive Strategic Advisor to Skill Dynamics, and Professor of Supply Chain Management at Royal Holloway University of London. 

The report surveys 210 supply chain and procurement professionals in the UK and US, and includes interviews with leading academics and professional experts on the topic. It finds that almost all (97%) are implementing sustainability initiatives, while well over three-quarters (81%) believe sustainability is becoming an increasing part of their role. They’re also relishing this part of their job; 81% feel energised by the opportunity to drive sustainability improvements, while 66% entered the profession for this very reason. However, despite respondents’ enthusiasm, the research exposes significant barriers that could hamper their progress. 

Almost a third (31%) say that organisational objectives are linked to driving efficiencies and growth, rather than improving sustainability. Well over half (58%), say that prioritising sustainability above cost in decision making is difficult because the benefits are hard to track – and 59% say that leaders will only approve sustainability initiatives with clear ROI. 

“Supply chain and procurement professionals are in a really difficult situation. They want to prioritise sustainability, but leaders won’t give them the resources they need unless they can project ROI on investments”, comments Professor Khan. “This is a real roadblock, as many of the returns on sustainability initiatives are hard to quantify, taking the form of reputational gains or business longevity. Professionals are clearly struggling to bypass this, so fall back into old habits of prioritising cost in decision making.   

“It’s leadership’s role to remove this roadblock – but supply chain and procurement professionals can also meet them halfway by evidencing the success of sustainability initiatives as much as possible. There’s clearly room for improvement here, as while 97% of respondents are implementing, on average, four sustainability initiatives, just 54% have targets for every one of these – and it’s very hard to evidence success without targets.”

A lack of ownership and accountability could be another barrier to progress. Just 40% of supply chain and procurement professionals feel they have a high level of responsibility for setting sustainability strategy and targets – or driving progress against these (37%). Concerning statistics given these same people are the ones implementing sustainability initiatives.

Reflecting on the research, Professor Khan concludes: “Supply chain and procurement professionals are being asked to improve the sustainability of their organisations, but few are formally being given responsibility for this, or being incentivised to drive progress. The vast majority (81%) say sustainability is an increasing part of their role, yet just 25% are rewarded for achieving sustainability targets. Organisations need to address this, because if supply chain and procurement professionals are not clear on their new sustainability remit, how are they supposed to fulfil it?”

To overcome roadblocks to sustainability progress, the report advises supply chain and procurement leaders to take the following actions. It also encourages business leaders to support and empower professionals to drive meaningful change: 

  1. Invest in training – Supply chain and procurement professionals need to understand how they can improve sustainability to fulfil this increasingly important part of their role.

  2. Partner with organisations that can help measure and manage environmental impact – 27% say that measurement and difficulty tracking ROI on sustainability investments is a barrier to them driving progress in this area. Partnering with external consultancies and technology providers will help increase this.

  3. Pick your battles – start small, and build up – Professionals should consider implementing fewer initiatives, but doing these really well. Demonstrating success will be critical to securing further funding for sustainability projects.

  4. Improve collaboration with other businesses – Businesses need to share information on their sustainability activities to help each other gauge whether their initiatives are successful or could be improved. 

  5. Change KPIs to incentivise sustainability – Just 25% of supply chain and procurement professionals say their reward is linked to achieving sustainability targets. Increasing this proportion would encourage professionals to take more responsibility for this. 

Skill Dynamics' CEO, Sam Pemberton reflects on the research and its recommendations: “While our report found that the majority of supply chain and procurement professionals believe that they have the training they need, what good looks like when it comes to skills isn’t a point in time measure. The sustainability landscape is changing all the time – indeed 43% of respondents told us they find it ‘extremely difficult’ to keep track of sustainability legislation. Leaders need to be cognizant of this, and ensure their teams are equipped and able to navigate this evolving landscape. Providing ongoing access to education and training is a vital part of this.” 

About the research 

The report analyses research findings from 210 supply chain and procurement professionals across the UK and US, in organisations over 5,000 employees. 110 respondents come from the retail sector, 50 from the manufacturing sector, and 50 from Automotive or Aerospace sector.

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