Sustain 2021: How We Can Rethink and Rebuild Global Supply Chains

March 30, 2021 Anna Kapica-Harward

Sustain 2021 took place on March 8-9 featuring an exceptional lineup of speakers and sessions, encouraging us to #RethinkRebuild and set a new attendance record. The 3,000 participants from 79 countries doubled the figures from last year, showing that global awareness and engagement in sustainable procurement has accelerated radically.

Among the keynote speakers of the event was former U.S. Vice President Al Gore, the co-founder and chairman of Generation Investment Management, and the founder and chairman of The Climate Reality Project, a nonprofit devoted to solving the climate crisis. Mr. Gore addressed the audience during the Plenary session on March 8, stressing the urgency of the climate crisis but also highlighting the opportunities that exist within business and supply chains to drive change.

 

Hope in a Time of Crisis

"There is no doubt that 2020 was an especially tumultuous year, as the COVID pandemic sickened and killed millions of people worldwide," said Mr. Gore. Alongside the pandemic, he spoke of movements against racial injustice as well as extreme weather events, driven by the climate crisis, that threaten to interrupt global supply chains by affecting the production of goods needed around the world. 

Although the outlook seems dire, Mr. Gore said he has genuine hope, both economically and politically and believes the past year -- and the current crisis -- has created opportunities that mustn’t be missed. 

He noted that with the inauguration of Joe Biden as the new President of the United States, there is renewed momentum to solve the climate crisis in partnership with allies in Europe. America has already rejoined the Paris Agreement and the President has pledged to spend $2 trillion to transition the country to a clean-energy future. Leaders in China, Japan and South Korea have also committed to go carbon neutral within the next few decades.

The EU, meanwhile, has committed to implementing the EU Green Deal with a carbon border adjustment mechanism for countries with an insufficient climate policy in order to prevent carbon leakage and to protect economic competitiveness and border adjustments will drive the accelerated decarbonization of domestic economies. 

 

A Global Acceleration

Plus, the pace has really picked up recently. Mr. Gore acknowledged this by quoting German economist Rudi Dornbusch in saying that, “In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could.”

"The sustainability revolution is now well underway," said Mr. Gore, and it is beginning to reshape the world, transforming our relations to business, to the environment, and to each other. As a result, companies are reinventing transportation with electric vehicles, reinventing agriculture with regenerative farming approaches and alternative options to meat, and reinventing energy consumption by integrating renewable energy into electricity grids.

This sentiment was echoed by Schneider Electric CEO, Jean-Pascal Tricoire, who believes the world has plenty to learn from how it has adjusted to the pandemic, pointing out that the way we work at the moment is much more sustainable than before. “We’ve all learnt to live in a different manner in the past year or so. There are things that we should never come back to again. There are things that we should do differently in the future.” 

Mr. Tricoire also stressed the need for immediate action if we are to have any hope in tackling climate change, “We should never, ever lose the sense of urgency. What strikes me is that every time we speak about climate change, we speak about the next big innovation coming 10 years from now, or measures that we should start applying in five years from now. Let’s face reality… If we don’t address it now, we’re going to see no positive effect of what we decide now before 10 years. Today, every decision counts.”

The good news, as Mr. Tricoire highlighted further, is that the technologies required to build and work more sustainably already exist and we know how to use them. The only thing we need is to change the way we think, the way we design and the way we build. And rethink the pace at which we are prepared to change our habits. 

 

How Can We Apply This in Global Supply Chains?

So, looking specifically at global supply chains, what are the most crucial aspects that we need to rethink - and what are the key trends that have transpired over the past year? 
The COVID-19 pandemic has driven home the importance of making our global supply chains more resilient. The supply shock that started in China in February 2020, and the demand shock that followed as the global economy shut down, exposed supply chain vulnerabilities just about everywhere. Temporary trade restrictions led to shortages of food, pharmaceuticals, medical supplies and other products a few weeks into the crisis, and made it clear to everyone the extent to which our systems are interlinked. 

Now, over a year later, many of these problems have not been resolved. Many companies are still reporting shortages of nearly everything, saying the COVID-19 pandemic has caused supply chain breakdowns

Taking the retail perspective, Andrew Newman, Procurement Director at London-headquartered multinational retailer Marks & Spencer, commented on how a great number of retailers in the U.K. went under and it was not the question of not making profit, they had simply run out of cash. 

“I’d say that no one really foresaw what was going to happen in 2020. Agility is an overused word, but it is the right one. We were at the sharp end of the pandemic in 2020, and we had to act quickly.” Initially, he explained it was about cost saving. But the great work the team did during the early months of the crisis resulted in a newfound outlook within the group and the executive board’s desire to change the way Marks & Spencers does business on a broader scale. “The two things we looked at were risk and sustainability,” said Mr. Newman.

Learn more about supplier sustainability in the retail and consumer goods sector check out the full panel discussion.

 

From Rating to Collaboration

Companies with mature sustainability programs have found a number of tactics that work particularly well in maintaining global supply chain resilience. Genuine commitment and collaboration are quoted by far the most quoted ones.

Jan Geisler, Vice President, Purchasing Strategy at Procter & Gamble: "We have been on a citizenship journey for a long time now with a lot of progress made, but much more needs to be done, of course. We leverage our brands, first of all, and the impact they can have. For purchasing, we want to bring our suppliers and agencies with us and leverage their mastery and expertise to help us on the journey. Of course, we focus on our employees as well as the communities that we operate and live in."

Mr. Geisler stressed that Procter and Gamble takes supplier relationships and their long-term very seriously, and this forms the basis of the work done by the procurement team. “We invest in supplier relationships for years, often decades, because we believe that that delivers the best long-term value in innovation and commercial, infomercial value, and so on,” he said. 
This was echoed by Brad Adams, Global Supply Chain Sustainability and Compliance Manager at Deere and Company “We never ask our suppliers to do anything we don’t do ourselves and we take what we ask for seriously.” 

Natalie Jaworski, Vice President of Citizenship at Johnson & Johnson, meanwhile, commented on how the health and pharmaceutical giant is currently pivoting its approach in supplier relationships. Rather than only rating supplier performance, the company is now placing more emphasis on how to improve their sustainability performance and help make their sustainable impact even stronger. And, as Ms. Jaworski stressed the company is “definitely doubling down because of everything that we’ve learned about the resilience of our supply chain last year.

Why not view the entire Maturing a Sustainable Procurement Program session. 

 

Toward Equality For All

Speakers at Sustain also noted that the pandemic highlighted the importance of placing equity at the heart of “building back better.” Deep-rooted social and racial inequities, exacerbated by the pandemic, sparked the Black Lives Matter movement that swept across the U.S. and the world. It opened the door for new conversations on how we can build a more equitable future for all. In the sustainability conversation, the concept of “just transition”, which aims to protect and empower the communities most vulnerable to climate change, has been gaining traction as a key component of economic recovery strategies. 

Two things are quite high on the agenda for procurement. One is the accelerated citizenship impact that we need to bring, and the second is an ongoing focus on supply chain resilience,” said Procter and Gamble’s Geisler.  “Equality and inclusion are incredibly important. We believe only together with our supply base, we can bring this positive change, all together, that our planet and our societies require.

 

The Only Future 

As we rethink and rebuild in the new normal, there is no other way but placing sustainability at the core of everything we do. And to do it effectively we must work together.

Nicolas Roux, Direct Sourcing Leader at Cytiva, said “I have the intimate conviction that the company who today doesn't pay attention to this topic, in 10 years they're probably not going to be around anymore.” His colleague Ryan Walker, Sustainability Leader, agreed and stressed that having sustainable procurement is essential if a company wants to be sustainable. And the best way to achieve this goal is to work with suppliers who share the same sentiment. 

With all this, we mustn’t forget that time is of utter importance here, and as Kara Hurst, Sustainability Leader at Amazon put it:

We go further and faster when we go together."

 

 

Missed Sustain? Why not watch some of the discussions at a time that works best for you? Most of the sessions are still available - check them out

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