It’s Time to Redefine Supply Chain Sustainability 

I had a frank conversation with an F500 sustainability leader in the United States recently. “Beleaguered” is the word that stuck in my head afterward.  

The zeitgeist may have moved away from sustainability as a moral imperative, but the commitment remains. To me, it seems obvious that supply chain decarbonization aligns with operations professionals’ urge to chase efficiency and drive business value.  

Maybe it’s time to redefine supply chain sustainability in terms of managing resources to maximize enterprise value, which includes customers, shareholders, and the wider ecosystem in which a business operates. After all, wasted energy and material usually mean lower margins, so carbon and cost follow the same curve.  

Moving the Goalposts 

For years, the mission of most sustainability teams was raising awareness, setting targets, disclosing progress toward commitments, and complying with regulations. The annual sustainability report became a proxy for progress as well-meaning companies struggled to impress NGOs and the public with investments in alternative energy, circular supply chains, and fair labor practices. 

Unfortunately, consumers have proven largely indifferent, as evidenced by the persistent demand for fast fashion brands like Shein or the difficulty HP has getting more than 10% of its printer cartridges returned and recycled. Meanwhile, many NGOs have developed an addiction to attacking big brands like H&M and Coca-Cola less because they are villains than because they attract attention, which motivates donors. Worse still, regulators have often demanded too much for businesses to realistically comply, as in the example of the EU’s Corporate Sustainability Due Diligence Directive. 

No matter how hard sustainability leaders try, critics would rather admire the problem than look for solutions, pushing for ever-wider definitions of supply chain responsibility. 

Reality Bites 

MIT and the Council of Supply Chain Management Professionals (CSCMP) recently published an extensive study of the state of supply chain sustainability. The good news is that the overwhelming majority of 1,200+ professionals surveyed say they are staying the course on their sustainability journey. 73% of respondents say there will be no change in commitments despite the US pulling out of the 2015 Paris Agreement, and nearly equal shares (15% and 12%) say they’ll either reduce or increase commitment levels.  

No one I have spoken to, even in confidence, says they plan to stop tracking or trying to reduce carbon emissions. The reality is that operations people view carbon emissions as a proxy for energy and materials efficiency. Plus, no sensible ops leader ever abandons a potentially valuable data time series just because the politics shift. 

Another reality is that business growth depends on energy, especially when countries outside the Organization for Economic Co-operation and Development (OECD) are concerned. ExxonMobil’s Global Energy Outlook offers two key data points about the world economy 2025-2050. The first is that global energy demand will keep growing, especially outside the OECD, where many F500 companies look for topline growth. The forecast – which has been highly accurate for the past 25 years – shows a flattening of overall energy demand as the population approaches 11 billion, implying a chance to raise living standards everywhere with decelerating energy consumption. 

The second important data point is a radical shift away from high-carbon energy sources (especially coal) in favor of low-carbon sources (especially wind and solar). Electrification takes off while oil and gas plateau. This forecast shows that even an oil giant like ExxonMobil plans on at least some decarbonization of the world economy. If this projection comes to pass, operations people who keep tracking their carbon emissions will look prescient as they smartly navigate the coming energy transition. 

Infinite Value 

Zero100 draws an infinite loop to represent the closed-loop nature of digital supply chains which leverage data, AI, and automation to continuously renew the business. We use the term “regenerate” to describe the last leg of the loop after consumer use and before returning to innovate and plan.  

Done right, this final step renews not only materials but also customer trust, sales contracts, IP, and business models, which markets reward (or penalize) with price-to-earnings multiples reflecting how far into the future investors see sustainable cash flows. 

Supply chain sustainability, by this definition, is not a performative ritual, but rather an engine driving enterprise value – and that never goes out of style.