Sustainability has become a key focus for companies looking to secure long-term success. However, achieving these goals requires a clear strategy, measurable goals, and ongoing improvement. Today we will explore how businesses can measure and drive sustainability within their supply chains to create value for both the planet and their bottom line.
Why
As we all know, investing in a sustainable supply chain creates value by aligning business operations with environmental and social responsibility. Beyond minimizing environmental impact, it enables companies to operate more efficiently, stay ahead of regulatory changes, and build lasting customer trust. Ultimately, sustainability in the supply chain strengthens both the resilience of the planet and the long-term success of the business.
How
How do we start your supply chain sustainability improvement journey? Within Chronion, we begin with the core business and the overall strategic direction. Sustainability must be embedded in the corporate strategy, not driven by a single department. When a clear sustainability strategy is established, we need to translate strategic objectives into clear, measurable goals. This begins with assessing where we currently stand, starting with a double materiality assessment.
Double materiality assessment
Double materiality means evaluating sustainability from two perspectives. The first is the inside-out view, where we assess how the company impacts the environment and society. This includes factors such as emissions, waste, or human rights violations. The second is the outside-in view, where we examine how external sustainability factors affect the business. This could involve new regulations, market shifts, or changes in consumer expectations.
By identifying the impacts, risks, and opportunities (IROs) from these assessments, we can set meaningful goals aligned with the company’s strategy. These goals can even be linked to the Sustainable Development Goals (SDGs), providing a clear roadmap for improving sustainability while advancing business success.
SCOR KPI framework
To measure sustainability goals, we use the SCOR framework, which helps assess performance across different levels of detail. SCOR allows us to track key metrics that align with our sustainability objectives. These goals can be broken down into various levels of detail. This framework breaks down sustainability goals into several levels of detail, ranging from broader such as “Waste generated” to more granular operational metrics like “Generated waste directed to disposal for landfilling”.
Once we have measured these goals, the next step is influencing them. This is done by connecting them to key supply chain drivers, such as demand planning, procurement, and inventory management. Each driver can be further assessed using driver metrics. For example, in the food industry, products are sometimes not sold before their "sell-by" date, resulting in commercial obsolescence. Improving demand planning with a focus on forecast accuracy and reducing forecast bias can help prevent this issue. This approach not only minimizes waste and improves sustainability outcomes but also optimizes overall supply chain performance by better matching supply to true market demand.
Key succes factors
Capturing value from sustainability initiatives can be challenging, with 78%* of companies struggling to realize their full potential. To succeed, several key factors are essential. First, top management support is crucial to driving change and prioritizing sustainability. Employee and stakeholder engagement through transparent reporting ensures alignment across all levels. Sustainability must also be a key decision-making factor in all improvement initiatives. Integrating sustainability into reward systems encourages ownership and accountability. Finally, high-quality, accessible data is vital to measure progress and make informed decisions. By focusing on these success factors, companies can better capture the value of their sustainability efforts.
Conclusion
Driving sustainability within the supply chain creates long-term value for both the planet and the business. By integrating sustainability into the corporate strategy, using frameworks like SCOR to measure progress, and aligning key supply chain drivers, companies can continuously improve. With top management support, employee engagement, considering sustainability in every decision, integration into reward systems, and good data quality , businesses can unlock the full potential of their sustainability efforts. At Chronion, we’re committed to this journey, knowing that a sustainable supply chain is essential for long-term success.
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