In an era where consumers demand more transparency and accountability, businesses are rethinking how their supply chains impact the environment and society. Recent global events, such as the COVID-19 pandemic and growing climate crises, have exposed vulnerabilities in traditional supply chains, pushing sustainability to the forefront. But how do businesses create sustainable supply chains, and why is this important for their long-term success?
These questions drive C-EDGE researcher Associate Professor Claudine Soosay's work, which focuses on developing supply chains that align with Environmental, Social and Governance (ESG) standards.
What Is Sustainability in a Supply Chain?
Traditionally viewed from an intergenerational perspective, sustainability ensures that today's decisions don’t negatively impact future generations. In the context of supply chains, sustainable development extends across both upstream (raw material sourcing, production) and downstream (warehousing, distribution, export and retail to customers) activities, encompassing what is known as the triple bottom line: balancing economic, environmental, and social dimensions.
In today’s interconnected global economy, supply chain sustainability is a multidimensional concern, integrating the activities of multiple firms across countries while meeting various stakeholder concerns. It is no longer just about reducing emissions or cutting costs but about reshaping entire business models to meet regulatory demands, public expectations and changing consumer preferences.
Why Sustainability Is Key for Business Success
Sustainability isn’t just an ethical imperative—it’s a financial one. According to the World Economic Forum (2024), businesses that invest in their supply chain’s sustainability (such as focussing on emissions reporting, circular economy practices and climate technology), perform better with higher profitability, enhanced brand image and stronger consumer loyalty.
Transforming Supply Chains for the Future
Companies now realise that integrating ESG principles into supply chain operations helps to reduce risks, improve efficiency, and enhance their reputation. It also meets the growing demands of consumers, investors, and regulators for more sustainable and ethical business practices.
New business models are emerging requiring a shared vision and commitment to sustainability goals. They encompass collaborative and integrative efforts with downstream and upstream partners for synergistic efforts in reducing carbon emissions, improving energy efficiency, and ensuring fair labour practices throughout the chain.
Practical Steps Toward a Sustainable Supply Chain
Associate Professor Soosay’s research into the Australian food supply chain offers valuable insights into practical sustainability initiatives that can also drive business value. The following actions can help firms move toward a more sustainable and profitable future:
- Climate change and food security: This requires more resilient and sustainable practices to overcome vulnerabilities from extreme weather events such as floods, droughts, heatwaves and bushfires disrupting food production and supply.
- Ensure safety, quality and integrity of food supply: This entails benchmarking and harmonising food standards such as Biosecurity and HACCP principles.
- Implement traceability systems: These systems ensure the efficient use of resources and energy while maintaining product quality.
- Source locally to reduce food miles: This reduces transportation costs, lowers greenhouse gas emissions, and supports local economies.
- Purchase in bulk: Buying in bulk minimises both cost and packaging waste, contributing to both sustainability and operational efficiency.
- Switch to green energy: Renewable energy options significantly reduce greenhouse gas emissions.
- Eliminate unnecessary plastics: Reducing plastic usage minimises waste and enhances a company’s environmental practices.
The Risks of Ignoring Sustainability
The commercial and reputational risks of ignoring sustainable supply chain practices cannot be overstated. Brand threats, such as consumer boycotts or loss of customer trust, can arise when companies are associated with unethical practices like underage labour, poor working conditions, or environmental degradation. Legal risks are also significant, particularly as governments tighten regulations around human rights, environmental impact, and product safety.
Firms that fail to adapt to the sustainability movement risk falling behind in a rapidly evolving market. On the other hand, those who embrace sustainable supply chains not only future-proof their businesses but also contribute to a better world.
The Path Forward
Building a sustainable supply chain is no longer just about reducing costs or meeting regulatory requirements. It’s about creating long-term value by addressing the environmental, social and governance aspects of business operations. As companies continue to evolve, sustainability will remain a critical factor in determining their success. Firms that embrace this change—and work collaboratively with partners across the supply chain—are the ones that will lead in a greener, ethical and more sustainable future.
Contact Associate Professor Claudine Soosay > Claudine.Soosay@unisa.edu.au
