Resource Center/Article04/16/2024

Five Challenges Brands Face When Pursuing Sustainability and Solutions to Overcome Them

Discover how companies tackle sustainability challenges in supply chains. From transparency to resistance, learn how logistics pros drive change.

As the world becomes increasingly aware of the impact of climate change and the importance of sustainability, companies are under pressure to become more environmentally conscious. One of the most significant areas in which companies are being called upon to make changes is their supply chain and logistics operations.  
What obstacles do brands face when working to become more environmentally conscious? And what would sustainability initiatives mean for logistics professionals? We explore these questions and more below.  

1. Lack of Visibility and Transparency 

A lack of visibility and transparency into operations often impedes companies striving to achieve greater sustainability in their supply chains. Challenges in identifying areas for improvement and assessing environmental impact hinder the ability to make informed decisions. To tackle this challenge, companies are increasingly investing in tools and technologies that offer greater data transparency and monitoring capabilities.  
One prime example of this investment is optimizing distribution center (DC) utilization, resulting in reduced mileage and carbon emissions. This is achieved by choosing the DC closest to the customer. Another solution is selecting the most environmentally friendly transportation mode, such as rail instead of air freight. By incorporating sustainability considerations into their transportation planning, shippers can achieve their sustainability goals while also improving their bottom line.  
This innovative solution is just one example of the ways that companies are addressing the challenge of supply chain sustainability and driving meaningful change toward a more sustainable future. 

2. Complexity of Global Supply Chains 

The complexity of global supply chains presents another challenge for companies looking to become more sustainable. With multiple suppliers, transportation modes, and distribution channels involved, it can be challenging to identify and mitigate the environmental impact of each step in the supply chain. Companies are addressing this challenge by working closely with suppliers to identify sustainable practices and implementing technologies, which enables them to monitor their environmental impact across the entire supply chain.  
Interestingly, returns are an example of a great opportunity here. It’s no secret returns pose an environmental cost. However, carriers such as FedEx and UPS have been partnering with retailers to reduce the logistical strain with no-box, no-label returns that can reduce environmental impact by streamlining the process and optimizing returns traffic (instead of using a truck carrying a single return, one truck may carry hundreds of returns). 

3. High Cost of Sustainable Practices 

Then, there’s also the cost of implementing sustainable practices to consider. While many sustainability initiatives have a positive impact on the environment, they often require significant investment, which can be difficult to justify from a financial perspective.  
However, companies are increasingly recognizing the value of sustainability in the long term, not just in terms of environmental impact but also in terms of brand reputation and customer loyalty. This is a key brand strategy, too, Apple is well known for its recycle-friendly no-plastic packaging. Not only can sustainable packaging be less costly (say goodbye to oversized packaging), but 71% of consumers are actively choosing products due to the sustainability factor of the product packaging. 

4. Lack of Regulation and Standards 

There is currently a lack of regulation and standards in the area of sustainability, making it difficult for companies to know what actions they should be taking to improve their environmental impact. While some countries and regions have introduced legislation aimed at reducing carbon emissions and improving sustainability, there is no global standard, which can lead to confusion and inconsistency in approaches.  
To address this, industry organizations are working to develop standards and guidelines to help companies improve their sustainability performance: 
  • The Sustainable Supply Chain Foundation (SSCF) is a non-profit organization that provides education and resources to help companies develop sustainable supply chain strategies.  
  • The Global Reporting Initiative (GRI) has developed sustainability reporting standards that guide how companies can report on their sustainability performance, including their supply chain sustainability. 
  • The Carbon Trust, a non-profit organization, provides certification and advisory services to help companies measure and reduce carbon emissions in their supply chains. 

5. Resistance to Change 

Finally, companies face resistance to change, both internally and externally. Some employees and stakeholders may be resistant to sustainability initiatives, either because they believe they will be too costly or because they are not convinced of their value. To overcome this challenge, companies must engage in stakeholder education and communication to ensure that everyone understands the importance of sustainability and how it benefits not only the environment but also the company and its stakeholders.  
As the demand for sustainable supply chain management continues to rise, shippers must identify areas where they can reduce their carbon footprint and minimize their environmental impact.  
By analyzing transportation data, it’s possible to identify opportunities for modal shifts, optimize routes, and consolidate shipments to reduce emissions and increase efficiency. Organizations should also develop sustainability metrics and reporting tools that allow them to track progress toward their sustainability goals and share their results with stakeholders. 
The challenges facing companies as they try to become more environmentally conscious are significant, but not insurmountable. By investing in tools and technologies that allow them to monitor their supply chain and logistics operations, working closely with suppliers to identify sustainable practices, and engaging in stakeholder education and communication, companies can overcome these challenges and reap the benefits of sustainability. Logistics professionals who can lead the way in sustainability initiatives will be well-positioned to succeed in a rapidly changing business environment. 
Want to make strategic decisions with confidence? Our team can advise you on critical matters such as achieving financial excellence alongside sustainability initiatives. Learn more about Green Mountain’s Advisory Services.  
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