Procurement: the missing link between sustainability and profitability?

This is an excerpt of the original article. It was written for the May-June 2023 edition of Supply Chain Management Review. The full article is available to current subscribers.

May-June 2023

If you were dropped onto this planet and landed at McCormick Place in the heart of Chicago in the middle of March, you would probably conclude that planet Earth had been overrun by robots. Everywhere you turned on the ProMat conference floor, there was a robot lifting something, putting something away, or carrying something to another location. But, despite a conference hall overrun by technology, the on-the-ground reality is a bit different. Not so long ago, commercial real estate firm Prologis estimated the number of facilities with any type of automation at about 10%. But that is changing—quickly. A recent report from JLL found that one-in-two…

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Politics notwithstanding, the Earth’s atmosphere is warming, and the warming curve is steepening. Increasingly severe and frequent weather events are taking a toll on lives and livelihoods as they disrupt agriculture, critical infrastructure and global supply chains.

Recent years have brought a string of unprecedented extreme weather events across the globe: heat waves and drought across the Indian subcontinent and parts of Europe; more devastating wildfire seasons in western U.S. states and Australia; intensifying monsoon rains and flooding across Southeast Asia and China; and record hurricanes, flooding and even freezing temperatures in the southern U.S. and Gulf of Mexico.

Regional events can often have global impacts, from crop shortages and higher food prices, to production shutdowns from power outages or water rationing. Unprecedented freezing temperatures in Texas and Louisiana in 2021, for example, shut down facilities producing automotive semiconductors and chemical resins critical to plastics manufacturing, resulting in months of global shortages.

Viewing such events as one-off, regional occurrences in isolation is no longer a comforting option. Organizations that fail to properly acknowledge and assess climate-related risks in their operations and take proper mitigating steps face not only potential direct climate-related damage and disruption but also increasing prices paid in carbon, lawsuits, reputational damage and lost business and investments over time.

Corporate boards and CEOs know they will need to strengthen the specific focus on decarbonization within their broader environmental, social and governance (ESG) objectives.

A major question is how best to manage the enormous challenge of climate resilience and emission reduction—both within and outside the organizational boundaries.

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