Supply Chain Sustainability: Critical Tools and Insights

Define purpose and enable it through a green supply chain — all while managing urgent cost pressures.

Workbook to Build Your Supply Chain Sustainability Strategic Plan

Download the Supply Chain Sustainability Workbook

Define, measure and achieve your supply chain sustainability goals.

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Enable enterprise purpose with a supply chain sustainability strategic plan

Sustainability is an organizational priority, and the supply chain function plays a key role in enabling sustainability plans. Top chief supply chain officers (CSCOs) are 19% more likely to have established green initiatives. Download our workbook to build your supply chain sustainability strategic plan. You will discover:

  • Three steps to align supply chain and sustainability KPIs

  • 20 example goals for ESG and supply chain management

  • Action steps to develop a green supply chain

The green supply chain prioritizes efficiency and empathy

Economic uncertainty, global instability and enhanced regulation impede already complex supply chains. Effectively navigate and positively impact this dynamic landscape through sustainable operations.

Be proactive in reducing GHG emissions to create competitive advantage

Environmental performance is a top 10 CEO priority. Global chief supply chain officers (GCSCOs) must transform supply chain as it accounts for +90% of greenhouse gas (GHG) emissions.

But 11% don’t see the supply chain risk. How do you prove the value of green supply chain management?

Sustainability isn’t just another supply chain cost; it protects against disruption. Renewable energy and carbon offsets not only cut GHG emissions but can also extend to green initiatives such as green purchasing.

2023 is the year to demonstrate steady progress toward sustainability goals. Setting goals is one thing, but making progress toward them is much more difficult. Here are four actions Gartner recommends you take in 2023:

Use sustainability as a strategy to mitigate disruption. Sustainability is helping executives optimize and reduce costs. For many organizations, energy costs are significant, and 80% of business leaders we surveyed said that their sustainability programs help their organizations optimize and reduce costs in response to disruptions. Dynamic energy costs will be persistent and need an appropriate response strategy. Sustainability strategies not only offset costs but also create value. Moreover, Gartner research shows that 83% of business leaders agreed that sustainability is directly creating both short- and long-term value that helps their organizations recover from disruptions. Protecting sustainability investments during tighter economic conditions can make an enterprise more resilient.

Align sustainability budgets with goal delivery. Executive leaders fall behind on goal delivery, due — in part — to misaligned or insufficient investment. Eighty-seven percent of the business leaders we surveyed anticipate increasing their financial investment in sustainability over the next two years. Approximately 45% of these leaders expect to increase their investment by at least 10%. These budgetary gains are somewhat offset by inflationary headwinds.

Begin estimating supply chain GHG emissions. Significant GHG emissions are found in value chains. However, data measurement methods and associated confidence vary. Don’t let concerns about data quality hamper action. Start today. Undertake a Pareto analysis of supply chain GHG emissions using a spend-based or average data method. Target direct data collection with suppliers where it matters. Be clear on how suppliers will be supported and incentivized to improve performance and how this will shape procurement decisions.

Focus on “two for ones” — sustainability investments that deliver both financial and sustainability outcomes. For example, reducing energy consumption helps mitigate both costs and GHG emissions. Sixty-five percent of the business leaders we surveyed anticipate that energy consumption costs, including electricity, will be partly mitigated through sustainability programs during the next 24 months. Three-quarters of business leaders report that their organizations are already reducing energy demand through optimization activities.

An additional stream of raw materials accelerates supply chain sustainability

Resource constraints make the circular economy critical. A circular economy decouples raw materials’ consumption from growth, driving efficiency and reducing environmental impacts. Future supply chains must adopt these green supply chain management practices to realize benefits: 

  • Assess the environmental performance of materials.

  • Retain control of materials without sacrificing customer value.

  • Identify products fit for the circular economy.

  • Share rewards with partners throughout the circular economy.

Embracing the principles of the circular economy cannot be done in isolation. It requires buy-in from executive leaders, partnerships to enable new business models, and changes to ways of working. Gartner analysts recommend investing in these three accelerators to advance the circular economy in supply chain:

Gain stakeholder buy-in by creating a solid business case.

  • Include financial and nonfinancial benefits in the business case.

  • Map value drivers to different stakeholders.

  • Maintain buy-in by demonstrating progress.

Leverage partnerships to scale circular economy activities.

  • Define how value will be created and distributed in partnership relationships. 

  • Build strong contracts, with defined expectations, shared outcomes and agreed break clauses. 

  • Establish principles and related governance mechanisms, such as voting and board structure, to reinforce decisions.

  • Embrace more democratized decision making.

Circular Economy

Be ready to make structural changes to the supply chain organization.

  • Base structural changes on the nature of the products that are selected for circular strategies and the types of business models that are applied. 

  • Identify changes needed to ways of working by mapping circular products, raw materials and associated data flows to how decisions are made today. 

  • Test supply chain decision-making processes to determine if they help or hinder circular economy goals.

Sourcing, manufacturing and delivery can uphold ESG values

Customer, investor and regulator demands are driving public commitments on environmental, social and governance (ESG) matters.

A green supply chain can balance the enterprise’s profitability and purpose goals. Green supply chain management strategies like green purchasing conserve natural resources while still meeting business needs.

Being profitable is no longer enough; environmental and community welfare are also key. Consider ESG in strategic planning and supply chain planning workstreams.

Fulfill business purpose with supply chain sustainability

Address escalating cost and supply security in the energy supply chain

Disruption to the energy supply chain may stem from ESG demands, climate change and/or trade policy. 

Energy shortfalls result in inflation, which may force production shutdowns. Clean energy commitments may be jeopardized, too. 

To combat risk to the green supply chain, CSCOs must strategically manage the energy supply chain: 

  • Prioritize agility in supply chain strategy.

  • Develop strategies to remediate future disruption.

  • Account for energy as variable cost instead of fixed cost.

Energy Supply Chain

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FAQ on supply chain sustainability

Supply chain sustainability is intentional action toward energy transformation and decarbonization for strong environmental performance, as well as ESG workforce implications. A green supply chain may deploy smart technology and reduce work friction for employees.

Sustainability can help supply chain executives grow the business, mitigate risk, reduce energy usage, and attract and retain next-generation supply chain talent.

To enable sustainability in supply chain operations and decisions, follow these steps:

  1. Establish technology and people resources focused on sustainability in key supply chain functions.

  2. Consider sustainability when making supply chain portfolio decisions.

  3. Integrate sustainability data, trends and insights into processes.

Digital technology can drive both financial and sustainability outcomes. For example, the Internet of Things (IoT), data and analytics can optimize wind turbines. This reduces costs and GHG emissions. Furthermore, AI and IoT can reduce food loss costs and waste.

Reaching net-zero GHG emissions isn’t an unrealistic environmental performance objective. Rather, it’s an imperative to meet increasing stakeholder expectations, while supporting the decarbonization of the economy. If done well, it can lead to innovation, job creation and growth. But the scale of the net-zero challenge is significant, especially when target setting encompasses value chains.


By embracing circular economy strategies, supply chain organizations can strategically improve raw material resilience, increase customer engagement and meet environmental commitments. This triple “win” can only be achieved if the business case is sound. Now is the time to strategically assess how reclaiming raw materials provides an opportunity to enhance market share through refurbishment or increase raw materials security through reclamation.

Drive stronger performance on your mission-critical priorities.