By Terry Smagh, Senior Vice President and General Manager, Asia-Pacific and Japan at Infor
In today’s interconnected and globalised world, the concept of a sustainable supply chain has moved from a niche concern to a core strategic priority for companies worldwide.
Companies have an unprecedented opportunity—and responsibility—to adopt sustainable practices that benefit not just the bottom line but also the environment and society at large. A sustainable supply chain is the blueprint for achieving this, enabling businesses to operate responsibly and reduce their ecological footprint while enhancing operational resilience.
Understanding a Sustainable Supply Chain
A sustainable supply chain goes beyond traditional notions of efficiency and profitability. It encompasses practices and processes designed to minimise environmental impact, reduce waste, and create positive social impacts across every touchpoint in the supply chain. A sustainable supply chain involves sourcing responsibly, optimising production, reducing emissions, ensuring ethical labour practices, and maintaining transparency across the entire network. The objective is to balance economic growth with environmental stewardship and social well-being, transforming supply chain operations to promote long-term sustainability for both businesses and the communities they touch.
The Importance of Sustainability in the Modern Supply Chain
Environmental Impact: Supply chains have long been contributors to environmental degradation, accounting for significant greenhouse gas emissions, resource depletion, and waste production. The impact of global warming, deforestation, water scarcity, and biodiversity loss increasingly affects business operations, driving an urgent need for companies to shift toward eco-friendly practices that limit their environmental footprint.
Consumer Demand for Transparency: Today’s consumers are more informed and increasingly hold companies accountable for their environmental and social practices. A survey conducted by KPMG found that 65% of consumers in APAC are willing to pay a premium for sustainability. Companies with sustainable practices build stronger brand loyalty, trust, and consumer advocacy.
Regulatory Pressure: Governments worldwide are implementing stricter environmental regulations, imposing penalties on companies that fail to meet sustainability standards. Compliance with these regulations is no longer optional but an essential requirement for doing business. Sustainable supply chain practices help companies meet regulatory requirements and stay ahead of upcoming mandates. Malaysia and Thailand are a prime example, requiring companies to report on environmental, social, and governance impacts.
Operational Resilience: Sustainable supply chains are also more resilient. By relying on responsible sourcing, reducing dependence on single suppliers, and adopting sustainable materials, businesses create a more stable and flexible network. This resilience mitigates risks associated with supply chain disruptions, where companies with greater diversity within their supply chains fare better than those without.
Financial Performance: There’s a strong correlation between sustainability and profitability. Sustainable practices can reduce costs over time through efficiency gains, waste reduction, and energy conservation. Companies that prioritise sustainability often see better financial performance and increased shareholder value due to their ability to manage resources effectively and create long-term value.
A Path Forward: Building a Better Tomorrow
Sustainability in supply chains is no longer a future aspiration — it is a present necessity. Adopting sustainable practices is the only viable path forward for businesses that seek to thrive in a socially conscious, resource-constrained world.
