Can We Have It All?
Is it possible to reconcile the twin goals of economic efficiency and sustainability within the current economic paradigm? Since the Paris Agreement and growing public scrutiny of corporate environmental practices, companies have been increasingly committed to sustainability. However, many remain hesitant due to concerns about financial costs. As climate impacts intensify and accusations of greenwashing rise, there’s a pressing need for adaptable strategies that integrate environmental and social factors with business performance.
While sustainability has become a priority for all of us, the relationship between sustainability initiatives and financial performance remains complex. More specifically, the pursuit of sustainability in supply chains often clashes with the demands of short and medium-term profitability. In this white paper, we delve into the complex interplay between economic performance and sustainable responsibility within the context of modern supply chains.
In the spring of 2024, FM Logistic and BearingPoint set out to investigate both preparedness for a more performant and sustainable supply chain and the potential for end-to-end collaboration.
On our behalf, Phronesis Partners undertook a series of expert interviews and surveyed 258 executives from a cross-section of industries in 18 countries across Europe, the Middle East, Asia, and the Americas.
Our central question was: Is it possible to reconcile the twin goals of economic efficiency and sustainability within the current economic paradigm? We formulated several hypotheses that delved into the limitations of existing high-performing and sustainable supply chain models today, their awareness and adoption.
While resilient and virtuous sustainable supply chain models exist, their adoption is hindered by conflicting priorities in the cost-benefit trade-off. This can lead to a reluctance to invest in sustainable practices, even when the long-term benefits are clear. Moreover, the implementation of sustainable supply chain models can be complex. Companies may face challenges in measuring and reporting on sustainability performance, collaborating with stakeholders, and adopting new technologies. These factors can create significant barriers to entry for businesses seeking to transition to more sustainable practices.
Despite these challenges, there is growing momentum towards sustainable supply chains, but the puzzle of sustainable supply chains is too complex for a lone player to solve. It requires a collective effort for change. This white paper explores the potential solutions and future directions that can help businesses navigate the apparent paradox of performance and sustainability.
