Former Senior Vice President, BSR
Over the past several months, I‘ve worked with a wide range of companies in global shipping, financial services, retailing, and consumer electronics to devise forward-looking sustainability strategies that take account of radically shifting conditions in their sectors and markets. In every one of these cases, the twin trends of “hyper-transparency” and global supply chain shifts have been at or near the center of attention.
I’ll be talking about this at the upcoming Sustainable Brands Conference in a session I'm leading on "future-proofing" your strategy, which will draw in part from BSR’s work with the Institute for the Future to develop a “Sustainability Outlook” for 2020. Here’s a taste of some of the trends I’ll be discussing, as well as some of the questions they raise for those of us looking to navigate new and unfamiliar waters.
Let’s start with supply chain shifts. The global supply chain built over the past 20 years is no longer able to provide the stability that value chain actors seek. Increasingly networked chains need to be 1) designed for significant changes in consumer demands and 2) optimized to meet increasingly urgent social and environmental impacts. Evidence includes the following:
- Large global retailers are seeking consolidation to fewer, more strategic suppliers over time.
- Increased regional sourcing, driven by local consumer needs and preferences (e.g. household goods in India), creates different challenges and opportunities compared to worldwide sourcing of globally recognized brands.
- Supply chain resiliency will be increasingly important, not just for weather changes and economic downturns, but also when the economy cycles up.
- “De-speeding” the supply chain will be increasingly important as current just-in-time models are challenged by the increased costs of fuel and warehousing.
- Increased connectedness of supply chains will offer more levers for control and stability, while increasing expectations related to sustainability impacts.
The future will also be characterized by “hyper-transparency”: Internet technology is driving new possibilities and expectations for real time information and decision making about the location, content, and origin of nearly everything. In 2020, we will have mobile tools for measuring, tracking, reviewing, and reporting the world around us. For example:
- Technological innovations, such as factory-level sensors, will provide real-time energy use data to help quantify footprints for products, organizations, and supply chains.
- Diverse and ever-broadening information requests will come from investors (CDP), analysts (DJSI, RiskMetrics), business customers, governments, and other stakeholders.
- Stakeholder campaigns to raise awareness of social and environmental conditions from raw materials extraction and production will lead to an increased desire for traceability.
- Product level information will be ubiquitous with today’s new product standards becoming widely adopted in the market (PAS 2050, WRI Scope 3).
- Real-time location and content mapping of stationary inventories and products being shipped worldwide will be enabled by satellite, RFID, and other systems.
The implications of the above trends for all those looking to deliver sustainable brands—in all senses of the word—in the coming years are obviously enormous. Here are just a few of the key questions to consider:
- How can you best position yourself for increased regional sourcing for consumers in India and China alongside the continued drive towards consistent globally recognized brands?
- What does “hyper-transparency” mean for the boundaries used to assess a company’s scope of control, and its degree of accountability and responsibility?
- What are the implications for the role that stakeholder engagement and communications should play in your strategy and operations?
What are the implications for the types and mix of products and services you provide, including new information services?
These are just a few of the questions we must answer as we seek to “future-proof” our business and sustainability strategies. Stay tuned.
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