The Retailer Winter Edition 2022


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Grainne Lynch Enterprise Sustainability, Sustainable Supply Chain IBM Consulting UKI

C limate change poses an existential threat, and without urgent, drastic action the world is set to reach the point of no return. COP26 led to some progress, but gov ernments are moving too slowly and grass roots action lacks impact. Only businesses – if willing – have both the agility and influence to lead the changes the world needs as it faces an increasingly tight deadline At the heart of this lies their influence over supply chains. From farm to fork, soil to soul, the supply chain enables every element of a product to get market. But traditionally a supply chain follows the polluting formula of take, make and waste. Creating less wasteful, circular supply chains will make a big difference, even though the necessary changes will feel counter-intuitive – they often demand investment without long-term payback – and will impact businesses’ value chain. But the cost of inaction is far greater. It’s likely that the gravity of the situation means they must go beyond net zero, with businesses having to engage in a “net positive” approach ¬– as defined by ex-CEOof Unilever Paul Polman – and giving more than they receive. Sustainability is fast becoming a business lifeline, too. Businesses are under pressure from employees, investors and customers who are now making active choices to support companies that take the lead – and evidence their role – in the climate crisis. Smart organisations realise they can differentiate through sustainability, and 49% of businesses already have sustainability goals for their supply chain*. Those that don’t commit will fall behind.

ACTION FROM THE TOP DOWN Sustainability can no longer be confined to a paragraph in a corporate responsibility report; it needs to become a core business principle. And so, it’s a leadership problem first. Business leaders must acknowledge that their organisation is part of – and can help fix – the climate change problem. To identify, plan and implement the necessary changes demands full visibility of the supply chain: where raw materials are extracted from, the level of emissions created and how consumers interact with – and dispose of – their products. Technology is a crucial enabler. Tools such as Internet of Things (IoT) sensors, a flexible data management system, automation, AI and the cloud help businesses gain real-time data from the supply chain and take fast action based on the latest, most accurate information such as carbon footprint calculations. Only when armed with this information can businesses foster regenerative practices that also enhance their long-term ability to thrive. For example, IBM’s Enterprise Intelligence Suite leverages technology to help business leaders plan for climate change, employing AI to monitor conditions, predict operational disruptions and report on environmental initiatives. This reduces the burden of reporting on procurement and operations teams. RISK-FREE COLLABORATION Designing a more sustainable supply chain and addressing the standards of the Greenhouse Gas protocol requires a united front. COP26 reminded us that this conversation – and action – demands everyone’s involvement. To innovate their processes fast enough companies must work together. This requires a shift in thinking for most leaders and businesses; supply chains typically compete. A connected, well-oiled supply chain ensures fast, efficient and more resilient operations. Unsurprisingly, from a business perspective it is advantageous to be cautious about sharing the workings of the supply chain. However, from a sustainability point of view, collaboration is crucial; building industry alignment around extractionwill save energy and money, reduce emissions and help tackle key issues such as deforestation. And technology helps to de-risk collaboration. Supported by leading-edge technology such as blockchain, companies can keep their data secure when working together IBM is working with clients to simultaneously support traceability and secure collaboration. IBM Food Trust is built on blockchain and acts to solve the worldwide problem of food supply chains. Its smart approach improves food traceability and safety – contaminated food sources can be identified at an unprecedented rate – eliminates inefficiency and reduces waste.

ability to thrive.” ‘‘

Only when armed with this information can businesses foster regenerative prac tices that also enhance their long-term

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