Harmonising Supply Chain Sustainability Strategies with Corporate ESG Initiatives

Seven of nine ESG initiatives significantly impact supply chains, focusing on packaging, circular economy, emissions, ethics, and more, as stated in a report by McKinsey.

Supply chain sustainability in the modern business landscape is pivotal for both corporate success as well as global well-being. Recognising the interconnectedness between the economic, social and environmental factors(ESGs), organisations today are pivoting towards sustainable practices.

“Achieving sustainability is a collective effort that transcends individual actions. Organisations, being major contributors to environmental impact, carry a significant responsibility in rectifying the imbalances created," said Vineet Kumar, Head of Supply Chain Excellence, Deepak Fertilisers & Petrochemicals Corp. 

Highlighting that the organisations have successfully transitioned 15 per cent of their energy consumption to renewable sources. He added, "They should be at the forefront of taking actions to correct and improve the current state of affairs, fostering a collective commitment to making sustainability a reality." 

Emission Reduction 

Transitioning to environmental sustainability, it takes significant strides in reducing carbon footprint and greenhouse gas emissions, addressing pressing environmental challenges. 

“Environmental sustainability takes a prominent role, with 80 per cent of initiatives aimed at reducing carbon footprint and greenhouse gas emissions. ITC is actively working towards carbon neutrality, water neutrality, and solid waste neutrality," said Sudhir Gupta, Head of Procurement, ITC Hotels.

Highlighting a dedicated industry-wide approach to mitigate environmental impact positively, "The commitment to being carbon positive, water positive, and solid waste positive for many years underscores the organisation's dedication to mitigating its environmental impact,” he added. 

Ethical Sourcing 

Ethical sourcing when it comes to sustainable supply chain involves the conscientious selection and management of suppliers and raw materials. Ensuring the entire production process adheres to ethical and responsible practices.

This approach extends beyond a company's immediate operations, emphasising fair treatment, transparency, and environmental responsibility throughout the supply chain. 

“The fundamental focus should be on sourcing and conducting business responsibly. Our approach revolves around the '3P' framework for sustainability or responsible sourcing," said Sanjeev Aggarwal, Director of Supply Chain - South Asia, Hafele India.

"The first 'P' emphasises People – extending beyond our company to encompass the entire supply chain. Highlighting the importance of ethical treatment and fair practices. The second 'P' directs attention to the Planet. The imperative here is clear: do not inflict harm on the environment in any way."

Environmental impacts in Delhi serve as a stark reminder of the urgency of addressing broader environmental concerns. 

"The third 'P,' or 'E' as in Product, emphasises that our products should not have adverse impacts. Examples like (Restriction of Hazardous Substances Directive) ROH in LED products contaminating water and air highlight the tangible consequences of certain manufacturing practices," he concluded.  

Ajay Singh, VP of Supply Chain Management at Hindustan Platinum stressed that within their organisation, sustainability has become an integral part of the processes, aligning with overarching principles of people, processes, and technology. 

“In essence, when we deliberate on responsible sourcing or sustainability, these three pillars – People, Planet, and Product – form the bedrock of our organisational philosophy,” he added.

Reducing Unsustainable Product Usage

“In the realm of product development, our commitment to sustainability is evident. We actively refuse the creation of unsustainable products.

The 'Arc' stage involves the re-utilisation of scrap or rework, either through internal reuse or by selling to entities equipped for recycling,” said Deepak Sharma, Head of Manufacturing, Supply Chain & Logistics (Integrated Supply Chain), Bajaj Electricals.

Turning to the social aspect, he mentioned that his recent designs, like the mixer, feature seven to ten-year warranties, aiming to discourage unnecessary resource extraction and promote product reuse. 

“In manufacturing, sustainability initiatives include the replacement of LPG with natural gas, reducing consumption through enhanced machinery, and the implementation of solar plants to curtail electricity usage," Sharma added.

Circular Economy

Using eco-friendly materials, reducing unnecessary resource extraction, and designing products that can be easily disassembled and recycled, creates a system where waste is minimised.

"Delving into the concept of circularity is crucial, particularly given the existing cultural norm in our country where repairing and reusing goods is ingrained.

The principles of a circular economy are applied from the initial stages of product design to the end-of-life considerations. 

Speaking at the BW Supply Chain Summit & Awards 2023, Chandni Trehan Sikand, Co-Founder & MD of SharpBuy Global Solutions said, "Circular economy, to me, is akin to a closed loop—a journey from a new product to its end of life, meticulously tracking each stage.”

To foster circularity, the pivotal starting point is embedding it into the product design. 

“Designing for circularity' is a key aspect. The second facet involves instilling adaptability into products, facilitating easy repairs without requiring intricate skills. Ensuring responsible disposal completes the circular chain, emphasising the need for environmentally conscious practices," she concluded.