Over the past five years, pressure from investors to improve supply chain sustainability has grown by 25%, making it the fastest-growing driver of sustainability efforts, according to a new report from the MIT Center for Transportation & Logistics (MIT CTL) and the Council of Supply Chain Management Professionals (CSCMP).
"Over the past five years, we have seen supply chains face unprecedented global challenges. While companies have made strides, our analysis shows that many are still struggling to align their sustainability ambitions with real progress, particularly when it comes to tackling Scope 3 emissions," says Dr. Josué Velázquez Martínez, MIT CTL research scientist and lead investigator. "Scope 3 emissions, which account for the vast majority of a company’s carbon footprint, remain a major hurdle due to the complexity of tracking emissions from indirect supply chain activities. The margin of error of the most common approach to estimate emissons are drastic, which disincentivizes companies to make more sustainable choices at the expense of investing in green alternatives. "
Key takeaways:
- Although 67% of firms surveyed do not have a net-zero goal in place, those that do are often unprepared to meet them, especially when it comes to measuring and reducing Scope 3 emissions.
- Companies react to different types of crises differently in regards to staying on track with their sustainable goals. If it is a network disruption like the COVID-19 pandemic or economic turbulence.
- Despite significant efforts, Scope 3 emissions—which can account for up to 75% of a company’s total emissions—continue to be the most difficult to track and manage, due to the complexity of supplier networks and inconsistent data-sharing practices.
- The report also underscores the importance of technological innovations, such as machine learning, advanced data analytics, and standardization to improve the accuracy of emissions tracking and help firms make data-driven sustainability decisions.
“Businesses and consumers alike are putting pressure on us to source and supply products to live up to their social and environmental standards. The State of Supply Chain Sustainability 2024 provides a thorough analysis of our current understanding along with valuable insights on how to improve our Scope 3 emissions accounting to have a greater impact on lowering our emissions," says Mark Baxa, president and CEO of CSCMP.
