The Science of Sustainable Supply Chains
Key Insights for Managers
This review article by Dara O’Rourke describes many practices multinational companies are using to discover, monitor, and seek to improve the working conditions and environmental performance of their global supply chain. For example, some are publicly reporting supply chain metrics. Some are creating shadow prices to better reflect the full cost of resource use and emissions to influence their internal profit-and-loss statements and pricing structure.
Some firms are quantifying associated risks to their business—such as altered water availability due to climate change, and brand risk reputation—to produce more holistic reports to investors. Meanwhile, a variety of mobile and web apps are aggregating companies’ eco-certifications (e.g., Forest Stewardship Council, the Marine Stewardship Council, and Green Seal) to communicate a brand’s sustainability efforts directly to consumers. The author concludes that better data, decision-making tools, and incentives are needed to improve how companies can predict and prevent unsustainable practices.