CINXE.COM

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widget ai_ad_widget-10 widget_ai_ad_widget"> <div id="div-gpt-ad-1647464320227-0" style="min-width:300px;min-height:250px;" > <script>googletag.cmd.push(function() { googletag.display('div-gpt-ad-1647464320227-0'); });</script> </div> </section> </div> </div> </div> </div> </header><div id="ai_ad_widget-3" class="ad topbillboard widget widget_ai_ad_widget"> <div id="topbillboard"> <script>googletag.cmd.push(function() { googletag.display('topbillboard'); });</script> </div> </div><script> (function($){ //Fix to Toggle navigation $('header .left .buttons .fa-search').click(function (e) { e.preventDefault(); e.stopPropagation(); $('header .left .hamburger').trigger('click'); }); })(jQuery); </script> <div class="wrap container" role="document"> <div class="content row"> <main class="main"> <article class="post-173269 post type-post status-publish format-standard has-post-thumbnail hentry category-operations tag-shipping-and-delivery tag-supply-chain company-ikea mcm_term-manufacturers mcm_term-sustainability"> <header> <h1 class="entry-title">ESG and Your Supply Chain: 3 Steps to a Streamlined Strategy</h1> <div class="meta-info"> <a href="https://multichannelmerchant.com/author/johnchalhoub/" rel="author" class="fn"> <img class="avatar img-fluid" src="https://multichannelmerchant.com/wp-content/uploads/2023/09/untitled-1-10.jpg"> </a> <div> <a href="https://multichannelmerchant.com/author/johnchalhoub/" rel="author" class="fn author-meta"> John Chalhoub </a> </div> <time class="updated" datetime="2023-09-27T19:06:23+00:00">September 27, 2023</time> </div> <img width="850" height="450" src="https://multichannelmerchant.com/wp-content/uploads/2023/05/sustainability-green-building-feature-1.jpg" class="img-fluid wp-post-image" alt="sustainable supply chain feature" decoding="async" srcset="https://multichannelmerchant.com/wp-content/uploads/2023/05/sustainability-green-building-feature-1.jpg 850w, https://multichannelmerchant.com/wp-content/uploads/2023/05/sustainability-green-building-feature-1-300x159.jpg 300w, https://multichannelmerchant.com/wp-content/uploads/2023/05/sustainability-green-building-feature-1-768x407.jpg 768w" sizes="(max-width: 850px) 100vw, 850px" /> </header> <div class="entry-content"> <p>ESG and DEI+J are hot topics in retail, and supply chain is a particular area of focus. Their importance will continue to grow, and their relevance increase as younger generations enter the workforce.</p> <div id="ai_ad_widget-2" class="ad-widget-in-content" style="text-align:center;margin: 20px auto;"> <div id="div-gpt-ad-1647464811495-0"> <script>googletag.cmd.push(function() { googletag.display('div-gpt-ad-1647464811495-0'); });</script> </div> </div> <p>As ESG becomes more relevant, thought leaders in retail recognize the importance of looking at ESG and DEI+J impacts across the enterprise. Within supply chain, the first step is identifying and mitigating the cost of your organization’s own emissions, but that’s just scratching the surface.</p> <p>In addition to Scope 1 and 2 emissions, it’s essential to evaluate your Scope 3 emissions throughout your entire supply chain. According to some analyses, Scope 3 emissions count for more than <a href="https://nrf.com/blog/retailers-set-science-based-targets-address-climate-change">90%</a> of a retail organization’s overall emissions footprint, and as much as 98%.</p><div><script>var AIAD_4f341fa9b8033a5692306b568798e122_67b89f08335c9;googletag.cmd.push(function(){var AIMAP_e02b89857b91a11b8be92fca409827ba = googletag.sizeMapping().addSize([970, 0], [[970, 90], [728, 90], [970, 250]]).addSize([768, 0], [728, 90]).addSize([320, 0], [300, 50]).addSize([0, 0], []).build();var AIMAP_336d69af4e13192f91fb34ababca7913 = googletag.sizeMapping().addSize([970, 0], [[970, 90], [728, 90]]).addSize([768, 0], [728, 90]).addSize([0, 0], []).build();var AIMAP_3cfce651e667ab85486dd42a8185f98a = googletag.sizeMapping().addSize([320, 0], [300, 250]).addSize([0, 0], []).build();var AIMAP_e55a54e1d4a840735c2e9f8afd01b09a = googletag.sizeMapping().addSize([320, 0], [[300, 600], [300, 250]]).addSize([0, 0], [[970, 90], [728, 90], [970, 250]]).build();var AIMAP_95200ff25af156a67c37a9382cf74da1 = googletag.sizeMapping().addSize([320, 0], [[300, 600], [300, 250]]).addSize([0, 0], []).build();AIAD_4f341fa9b8033a5692306b568798e122_67b89f08335c9 = googletag.defineSlot('/987/Multichannelmerchant.com/mcm_native', 'fluid', 'div-gpt-ad-23003939171-0-67b89f08335cc').addService(googletag.pubads()); });</script></div><div style="text-align:center;margin: 20px auto;" class="widget widget_ai_ad_widget"><div id="div-gpt-ad-23003939171-0-67b89f08335cc"><script>googletag.cmd.push(function() { googletag.display('div-gpt-ad-23003939171-0-67b89f08335cc'); });</script></div></div> <p>Here are some important ways to boost sustainability in your supply chain as you work to integrate it into your overarching ESG/DEI+J strategy.</p> <h4>Assess the Full Impact of Your Supply Chain</h4> <p>Supply chain impact is vast and varied. It takes time and intention to fully grasp the emissions involved end to end. Here are a few ways to measure your supply chain emissions’ environmental and human impact.</p> <p><strong>Return to the source: </strong>The largest impact will likely come from goods purchased and sold, so it is especially important to consider them. Where possible, swap less sustainable products or materials for less energy-consuming alternatives. Consider sourcing materials locally and stay committed to holistic stewardship of the environments and communities they come from.</p> <p><strong>Fabrication and manufacturing: </strong>This is often the most significant contributor to your emissions footprint. Look at the full manufacturing process through the lens of reducing impact. That might include using longer-lasting materials, choosing a more sustainable manufacturing method, or incorporating more recycled and recyclable materials.</p><div><script>var AIAD_4f341fa9b8033a5692306b568798e122_67b89f0833ace;googletag.cmd.push(function(){var AIMAP_e02b89857b91a11b8be92fca409827ba = googletag.sizeMapping().addSize([970, 0], [[970, 90], [728, 90], [970, 250]]).addSize([768, 0], [728, 90]).addSize([320, 0], [300, 50]).addSize([0, 0], []).build();var AIMAP_336d69af4e13192f91fb34ababca7913 = googletag.sizeMapping().addSize([970, 0], [[970, 90], [728, 90]]).addSize([768, 0], [728, 90]).addSize([0, 0], []).build();var AIMAP_3cfce651e667ab85486dd42a8185f98a = googletag.sizeMapping().addSize([320, 0], [300, 250]).addSize([0, 0], []).build();var AIMAP_e55a54e1d4a840735c2e9f8afd01b09a = googletag.sizeMapping().addSize([320, 0], [[300, 600], [300, 250]]).addSize([0, 0], [[970, 90], [728, 90], [970, 250]]).build();var AIMAP_95200ff25af156a67c37a9382cf74da1 = googletag.sizeMapping().addSize([320, 0], [[300, 600], [300, 250]]).addSize([0, 0], []).build();AIAD_4f341fa9b8033a5692306b568798e122_67b89f0833ace = googletag.defineSlot('/987/Multichannelmerchant.com/mcm_native', 'fluid', 'div-gpt-ad-23003939171-0-67b89f0833acf').addService(googletag.pubads()); });</script></div><div style="text-align:center;margin: 20px auto;" class="widget widget_ai_ad_widget"><div id="div-gpt-ad-23003939171-0-67b89f0833acf"><script>googletag.cmd.push(function() { googletag.display('div-gpt-ad-23003939171-0-67b89f0833acf'); });</script></div></div> <p><strong>Getting from point A to point B: </strong>Shipping materials can be a major contributor to carbon emissions. It’s essential to consider alternate, less carbon-intensive methods for transporting goods. That includes using recyclable materials and considering <a href="https://multichannelmerchant.com/operations/amazon-grows-boxless-packaging-and-the-industry-is-watching/">alternate packaging strategies</a>. Consider materials that can be recycled or composted and exploring methods to reduce product size and weight. Ikea, for example, is nearly synonymous with the concept of <a href="https://www.cnbc.com/2019/10/05/psychology-behind-ikeas-huge-success.html">flat-pack shipping</a> products that customers assemble at home.</p> <p><strong> </strong><strong>Take a fresh look at product use.</strong> It’s essential to establish a circular business model for product use. A circular business model generally includes:</p> <ul> <li><strong>Maintaining ownership</strong>: Through a subscription or other ongoing program, the manufacturer rents or leases the product to customers rather than selling it outright. The organization producing it retains responsibility after the customer no longer needs it.</li> <li><strong>Increase durability</strong>: Look for ways to make your products last longer. A more durable product also creates a compelling case for premium pricing.</li> <li><strong>Design to recycle, reuse, or compost</strong>: Ask how the product could be reused for another purpose or disposed of sustainably.</li> </ul> <h4>Quantify Your Supply Chain Emissions</h4> <p>While Scope 3 emissions are the largest contributor to most producers’ emissions, methods for tackling them vary widely across industries and organizations.</p> <p>The first step is creating a detailed inventory and setting benchmarks to work toward based on other players in your industry. See how your performance compares to peers by researching their emissions impact across all three scopes. This will help identify your greatest opportunities for improvement.</p><div><script>var AIAD_4f341fa9b8033a5692306b568798e122_67b89f0833f1d;googletag.cmd.push(function(){var AIMAP_e02b89857b91a11b8be92fca409827ba = googletag.sizeMapping().addSize([970, 0], [[970, 90], [728, 90], [970, 250]]).addSize([768, 0], [728, 90]).addSize([320, 0], [300, 50]).addSize([0, 0], []).build();var AIMAP_336d69af4e13192f91fb34ababca7913 = googletag.sizeMapping().addSize([970, 0], [[970, 90], [728, 90]]).addSize([768, 0], [728, 90]).addSize([0, 0], []).build();var AIMAP_3cfce651e667ab85486dd42a8185f98a = googletag.sizeMapping().addSize([320, 0], [300, 250]).addSize([0, 0], []).build();var AIMAP_e55a54e1d4a840735c2e9f8afd01b09a = googletag.sizeMapping().addSize([320, 0], [[300, 600], [300, 250]]).addSize([0, 0], [[970, 90], [728, 90], [970, 250]]).build();var AIMAP_95200ff25af156a67c37a9382cf74da1 = googletag.sizeMapping().addSize([320, 0], [[300, 600], [300, 250]]).addSize([0, 0], []).build();AIAD_4f341fa9b8033a5692306b568798e122_67b89f0833f1d = googletag.defineSlot('/987/Multichannelmerchant.com/mcm_native', 'fluid', 'div-gpt-ad-23003939171-0-67b89f0833f1e').addService(googletag.pubads()); });</script></div><div style="text-align:center;margin: 20px auto;" class="widget widget_ai_ad_widget"><div id="div-gpt-ad-23003939171-0-67b89f0833f1e"><script>googletag.cmd.push(function() { googletag.display('div-gpt-ad-23003939171-0-67b89f0833f1e'); });</script></div></div> <p>Next, focus on one area that would be most impactful for reducing emissions. Improve incrementally and avoid siloes by looping in stakeholders from across the organization.</p> <h4>Examine the Human Element</h4> <p>Greenhouse gas emissions impact the natural environment and the people and communities your supply chain touches. Prioritizing ethics, legal parameters and economic factors is crucial as you evaluate the impact.</p> <p>Retailers expose their businesses to unnecessary risk when they work with suppliers that use unethical practices, such as unsafe working conditions and child labor. Performing due diligence to ensure you’re engaging the right suppliers and partners is just as important as careful planning.</p> <ul> <li><strong>Remember your obligations: </strong>Safe and sustainable labor practices, ethical treatment of animals, and low-impact production are all squarely on the shoulders of your organization.<strong><br> </strong></li> </ul> <ul> <li><strong>Choose suppliers and partners carefully: </strong>Seek out suppliers and other partners who share your values and encourage them to improve their sustainability practices.</li> </ul> <ul> <li><strong>Quantify your impact: </strong>Keep local communities top of mind as you consider your end-to-end supply chain, especially vulnerable ones. Seemingly minor economic or environmental disruptions can have serious impacts on these populations. For example, the degradation of natural resources or local water supplies can lead to food insecurity and economic hardship.<strong><br> </strong></li> </ul> <ul> <li><strong>Be the change: </strong>Look for ways to not only avoid harming communities, but also to impact them positively. This could be investing in reforestation efforts, incorporating the local workforce or stimulating the local economy.</li> </ul> <h4>What’s Next?</h4> <p>Moving forward, think holistically about integrating your supply chain into your ESG strategy. This includes solidifying a target for your supply chain and identifying which leaders, incentives, and other investments you’ll need to make it happen. Methods for defining this future state include solidifying benchmarks and other key performance indicators, employing design thinking principles, creating a system to score suppliers and other partners and leveraging a carrot-and-stick approach to inspire action.</p><div><script>var AIAD_4f341fa9b8033a5692306b568798e122_67b89f0834339;googletag.cmd.push(function(){var AIMAP_e02b89857b91a11b8be92fca409827ba = googletag.sizeMapping().addSize([970, 0], [[970, 90], [728, 90], [970, 250]]).addSize([768, 0], [728, 90]).addSize([320, 0], [300, 50]).addSize([0, 0], []).build();var AIMAP_336d69af4e13192f91fb34ababca7913 = googletag.sizeMapping().addSize([970, 0], [[970, 90], [728, 90]]).addSize([768, 0], [728, 90]).addSize([0, 0], []).build();var AIMAP_3cfce651e667ab85486dd42a8185f98a = googletag.sizeMapping().addSize([320, 0], [300, 250]).addSize([0, 0], []).build();var AIMAP_e55a54e1d4a840735c2e9f8afd01b09a = googletag.sizeMapping().addSize([320, 0], [[300, 600], [300, 250]]).addSize([0, 0], [[970, 90], [728, 90], [970, 250]]).build();var AIMAP_95200ff25af156a67c37a9382cf74da1 = googletag.sizeMapping().addSize([320, 0], [[300, 600], [300, 250]]).addSize([0, 0], []).build();AIAD_4f341fa9b8033a5692306b568798e122_67b89f0834339 = googletag.defineSlot('/987/Multichannelmerchant.com/mcm_native', 'fluid', 'div-gpt-ad-23003939171-0-67b89f083433a').addService(googletag.pubads()); });</script></div><div style="text-align:center;margin: 20px auto;" class="widget widget_ai_ad_widget"><div id="div-gpt-ad-23003939171-0-67b89f083433a"><script>googletag.cmd.push(function() { googletag.display('div-gpt-ad-23003939171-0-67b89f083433a'); });</script></div></div> <p>It’s essential to map out all channels and their associated operations. That may include creating a risk/opportunity matrix that considers different stakeholders and their priorities.</p> <p>Finally, remember that effective change often starts small and builds as teams grow toward alignment. Follow the 80-20 rule: the minority of your suppliers will make up most of your emissions, so concentrate your efforts there in the early stages of implementation.</p> <p><em>John Chalhoub is a senior consultant, ESG with </em><a href="https://www.pointb.com/"><em>Point B</em></a></p> <div class="ctx-module-container ctx_default_placement ctx-clearfix"></div> <span class="ctx-article-root"></span> </div> <footer> <div class="related-tags"> RELATED TAGS: <a href="/topic/shipping-and-delivery" rel="tag">shipping and delivery</a>, <a href="/topic/supply-chain" rel="tag">Supply chain</a>, <a href="/company/ikea" rel="tag">IKEA</a> </div> <div class='ctx-module-container ctx_shortcode_placement ctx-clearfix'></div> </footer> <section id="comments" class="comments"> </section> </article> </main> <aside class="sidebar"> <div id="ai_ad_widget-4" class="ad top-halfpage widget widget_ai_ad_widget"> <div id="top-halfpage"> <script>googletag.cmd.push(function() { googletag.display('top-halfpage'); 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