Sustainable Supply Chain (2024)

How sustainable supply chains create trust

Does our firm support poor working conditions, forced labour or other violations of human rights along the global supply chain? How do climate risks affect our supply chain, and what climate footprint do our products leave behind? Are we consistent enough in our social and ecological practices? More and more companies are facing questions like these. As the associated risks increase, so do the statutory requirements – and expectations on the part of various stakeholder groups.

Ensuring transparency about your own supply chain, leveraging digital solutions to increase efficiency and minimising detrimental effects on the environment and our fellow man – no easy feat in a global economy with complex value chains. Our supply chain management and sustainability experts can help you overcome these hurdles – from developing strategies to designing processes through to implementing organisational and digital structures.

Three key drivers are increasing pressure on companies to make their value chains more sustainable:

• Consumers are increasingly demanding "clean products" – this makes trust a critical factor for a brand's success.
• Investors and analysts are increasingly taking into account social and ecological risks in their valuations.
• The focus of regulatory developments is shifting to corporate due diligence.

Sustainable supply chains as a competitive factor

Key stakeholder groups such as customers, employees, investors and business partners demand that companies be able to provide information at a moment's notice on how they ensure that minimum social and ecological standards are met in their own production facilities and by their suppliers. Transparency is key to a sustainable supply chain.

The benefits of sustainable supply chains

Companies need to take on a number of challenges on their quest for a sustainable supply chain. However, their effort is rewarded in many respects:

• The companies are in compliance with the rising requirements and increasingly strict rules and regulations.
• They bolster their brand as employers and reduce their reputational risks.
• They build up solid relationships with suppliers and thus for resilient, transparent supply chains.

Key questions on the way to a sustainable supply chain

Companies must ask themselves a host of questions when integrating sustainable supply chains into their operations:

• How can we manage complex supply chains and the sheer number of challenges?
• How can we make sure that we identify the opportunities and risks within our market early on?
• How do we create transparency about diverse groups of products and goods?
• How can we live up to the customers' new demand for sustainability, and anchor it within our brand?
• How can we use our business model to grow beyond incremental innovation?
• Does our governance structure actually fit our company? For instance, how well do the compliance and the procurement departments work together?
• How are our contracts structured? What about our liability?
• How can we design and implement IT-assisted management and monitoring systems?
• Are we living up to new demands on the part of employees?
• Do we approach political/regulatory developments from a holistic perspective?
• Are we able to hold our own in dialogue with society and investors?

Individualised range of services that meet specific requirements

Our sustainable supply chain experts can help you implement your requirements. We will work with you to develop a company-specific strategy for analysing potential ecological and social risks, as well as the relevant management systems. In doing so, we will develop bespoke strategies for your supply chain and help you to implement them into your organisation, processes and digital presence.

This comprises the following elements:

• Identifying new fields of business and existing structures to expand the use of new demand.
• Conducting stakeholder and risk analyses along the supply chain.
• Designing and implementing digital solutions and assets to improve transparency.
• Measuring positive and negative effects throughout the network and developing performance indicators to measure those effects.
• Adjusting supply chain footprints.
• Examining existing governance structures in order to improve the procurement organisation and processes.
• Drafting a Supplier Code of Conduct and guidelines for auditing social and ecological supplier requirements – including scoring systems.
• Optimising internal audit and review processes.
• Developing labels and certifications.
• Designing and conducting workshops and training sessions for suppliers.
• Auditing suppliers, production facilities and management systems in accordance with recognised standards.
• Establishing and developing industry-wide initiatives.

PwC's sustainability experts have the know-how you need to help you establish a sustainable supply chain. We are familiar with the requirements of supply chain management and will help you devise the right strategy for your organisation to develop a sustainable supply chain and implement an audit and management system that is suited to your needs. We will work with you to develop specific organisational requirements – from supply chain inception, from the end customer to x-tier supplier. That's because if you understand your end customers within the individual industries, you can successfully adapt your supply chain.

We work closely with our internal supply chain, procurement, sustainability, audit and technology experts. In order to develop a supply chain strategy that fits your business model, we can offer you assistance from within our network of international and sector-specific specialists. Our experts will help you identify risks, understand regulatory changes and integrate them into your governance, IT and reporting structures.

The Digital Supply Chain podcast

"In this podcast episode of Tom Raftery's "Digital Supply Chain", our expert Dr Jan Joachim Herrmann discusses the requirements for companies with regard to sustainable supply chains and illustrates the opportunities that arise for companies when they rely on transparent and sustainable supply chains.

Listen now*

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“End customers are demanding sustainability in production more than ever before. In a first step, these requirements relate above all to B2C industries. However, this demands a consistently sustainable supply chain transparency right through to the last link in the value chain. Ultimately, all industries will have to accept that there will be corresponding changes in demand.”