Globalization has rapidly changed our world and provided us with many of the products and services we’ve come to rely on. Unfortunately, the global supply chains that make this possible cause extensive environmental damage and contribute heavily to climate change. As a result, many companies are looking for sustainable means of production that find balance in environmental accountability and economic advancement.
This article describes the environmental impacts of global supply chains before delving into how companies may achieve a sustainable supply chain that is both environmentally and economically responsible.
Environmental Impacts of Global Supply Chains
The international networks that provide goods, services, and resources to worldwide consumers are known as global supply chains. As our world grows in its development and globalization, global supply chains provide billions of people with everyday items, including:
- Clothing
- Footwear
- Food
- Plastics
- Furniture
- Electronics
The majority of our household goods are refined from raw materials and processed in developing nations like China and Vietnam. Once finalized, products are shipped across the world for distribution and sales.
On a large scale, these global supply chains cause devastating environmental damage, including:
- Deforestation
- Water consumption and pollution
- Greenhouse gas emissions
- Air pollution
- Solid and chemical waste
These degradations can occur at every step of supply chains, from harvesting raw resources to product distribution. Studies indicate that nearly 90% of the environmental damage caused by consumer goods stems from their supply chains.
With these significant environmental impacts, many global producers are turning to sustainable means of production. However, most fall short as increasing demand outpaces the availability of sustainably-produced resources, and the low costs of conventional manufacturing processes outweigh the immediate economic benefits of sustainable changes.
Reaching Sustainability
Many companies around the world have taken steps to reduce their environmental impacts, but few have been successful in creating entirely sustainable supply chains.
The majority of sustainability issues stem from the roots of the networks, in the manufacturing and resource refinement processes. These parts of global supply chains most often occur in developing nations, where human rights and environmental consideration take a back seat to production, largely due to a lack of national legislation. As a consequence, many of the production processes result in:
- High emissions from oil processing
- Chemical waste from clothing dye
- Solid waste from plastic packaging
- Deforestation from timber harvests
Studies suggest that a significant number of multinational corporations are unaware of the origin of their products’ source materials, resulting in unethical and environmentally detrimental practices occurring at the foot of their supply chains.
For global supply chains to reach true sustainability, corporations must ensure environmental consciousness at every level of the chain. To do so, many companies rely on thorough and regular environmental compliance audits that promote transparency and consistent improvement in their networks. To do so, many companies rely on third party quality assurance services to conduct thorough and regular environmental compliance audits that promote transparency and consistent improvement in their networks.
Corporations that take a hands-on approach to their supply chains and oversee compliance in environmental regulations are much more likely to reach full sustainability. This requires oversight of:
- Resource harvesting
- Resource refinement
- Product manufacturing
- Waste disposal
- Packaging
- Distribution
Companies that have reached sustainability in any aspect of their supply chain have had to invest significant financial assistance, guidance, and oversight to service providers. Suppliers that violate environmental codes often do so out of necessity and lack of resources, and therefore rely on direct assistance from the multinational corporations they work for.
While investing large amounts of money into low-tier steps of the supply chain may be an initial financial risk to many companies, economists argue that investing in sustainable practices is economically beneficial in the long run, as it produces more jobs and more sales than conventional means.
Sustainable Global Supply Chains: A Possible Future
The methods of global supply chains that have worked to provide mass-produced international consumer goods are quickly becoming outdated as their environmental impacts overtake their economic benefits.
As we move forward towards more sustainable means of production, multinational corporations must become far more involved in their supply chains and must work closer with their suppliers to ensure sustainability at every level. Doing so will require significant investment of time, money, and substantial changes to the conventional norms, but in the process, corporations can reach true sustainability in their global supply chains.