A guide to sustainable supply chains

Discover what defines a sustainable supply chain, why it's crucial and real-life examples from industry leaders like Tesla and Ikea.

Whether you’re looking into embarking upon a career in sustainable supply chain management, or you’re simply intrigued as to the benefit sustainability throughout supply chains can have on companies, our guide to sustainable supply chains has all you need to know. 

What is a sustainable supply chain? 

A typical supply chain involves the coordination of various elements, including suppliers, manufacturers, distributors, retailers and consumers, to ensure the efficient flow of goods, materials and information.  
 
Meanwhile, a sustainable supply chain functions the same way as the aforementioned traditional supply chain, but the key principles differ.

A sustainable supply chain involves environmentally friendly practices, transparency and accountability, and social equity, regarding things like fair labour practices and adherence to human rights.

The objective of a sustainable supply chain is to reduce adverse effects of procedures on the environment, society and economy, whilst still getting the job done efficiently. 

Why are sustainable supply chains important? 

Here are some key reasons why sustainable supply chains, sometimes known as green supply chains, and sustainable supply chain management is important: 

• Environmental impact: One of the main aims of a sustainable supply chain is to reduce the impact on the environment. Through means such as utilising environmentally friendly practices, using raw materials more efficiently, reducing resource consumption where possible and managing waste responsibly, industries can contribute to the preservation of natural resources, which have a huge impact on the planet. 
   

• Cost effectiveness: Eco-friendly processes such as waste reduction and responsible resource management can result in cost savings over time. For example, adopting energy-efficient energy use can reduce overall consumption and lower utility costs over the life of the equipment. 
   

• Social responsibility: Sustainable supply chain management involves orchestrating seamless operations and logistics, whilst considering ethical and fair labour practices, including issues such as health and safety at work and the protection of workers’ human rights. The impact of this social responsibility is far-reaching, with workers, their communities, companies themselves and their consumers all benefiting from these ethical practices. 
   

• Company reputation and image: When a company follows ethical and sustainable practices, it not only helps them meet regulatory requirements, but can increase buy-in from ethical stakeholders and bolster their reputation with customers, thus increasing sales. 
   

• Risk management: Companies who implement sustainable supply chain practices are often more resilient in the face of risks such as climate-related or social issues, and resource scarcity.  
   

• Worker productivity and retention: A company showing commitment to social and environmental responsibility can benefit employee morale and productivity. Happiness at work also aids employee retention, which benefits businesses too. 

Examples of sustainable supply chains 

As social and environmental responsibility becomes more widely spoken about, many companies are tightening up their act and working towards a 100% sustainable supply chain.

Here are some examples from different industries, of where large companies have reduced their environmental impact or promoted social responsibility through sustainable supply chain management. 

1. Tesla 

Tesla is at the forefront of advancing sustainable transportation. The company's electric cars have zero emissions, which has a significant impact on reducing greenhouse gas emissions.

In 2021, Tesla's global fleet, comprising electric cars, energy storage and solar panels, prevented the emission of 8.4 million metric tons of CO2e for its customers. 

2. Unilever 

Over half of Unilever's plastic packaging was reusable, recyclable or compostable in 2021, and the company recycled 633,344 tons of waste in the same year, out of a total 658,665 tons of generated waste. 

By 2025, they have pledged to halve the amount of virgin plastic they use in their packaging and achieve an absolute reduction of more than 100,000 tonnes.

3. IKEA 

IKEA uses renewable energy sources, such as wind and solar power, in its manufacturing and transportation processes. Through its IWAY program, IKEA ensures the responsible sourcing of its products, services, materials and components. Not only that, but IKEA set clear expectations and ways of working for environmental, social and working conditions, as well as animal welfare. 

How an MSc Supply Chain Management can help you understand sustainable supply chains  

Are you interested in learning more about sustainable practices in supply chain management? Do you want to build your understanding of optimising processes, streamlining operations and eliminate bottlenecks in supply chains?

Find out more about our MSc in Supply Chain Management. This exciting course is fully online, part-time and flexible, meaning you can expand your knowledge on your own terms. 

Take a look at the day-to-day responsibilities of a supply chain manager or discover more about why you’d benefit from studying supply chain management.