Stakeholder influence on sustainable supply chain management in 2022
Sustainability is the new slogan in the processes around the development of goods or products. The goal is to protect the earth for future generations to enjoy. It takes a concerted effort to avoid anything that can harm the environment.
the UN Sustainable Development Goals (SDGs) highlight 17 main areas of concern. These include drinking water and sanitation, clean and affordable energy and reducing inequalities.
And the world is already embracing sustainability. There is, for example, a move towards the use of renewable energy sources.
Solar and wind replace the need for fossil fuels. Industries must be more strict not to pollute the environment during manufacturing.
It is undoubtedly a process that requires the contribution of all actors in the supply chain. This is why it is important to understand how they influence supply chain sustainability.
Understanding Supply Chain Sustainability
Supply chain sustainability is any step to reduce negative impacts. It concerns both the environment and man.
It looks at the entire supply chain process. That is to say from the stage of the raw material to the delivery of the final product to the customers.
These include manufacturing and production, storage and transportation. So it’s not just about minimizing the damage of the process. It should also include the positive impact on communities.
The benefits of embracing sustainability are many. These include positive brand perceptions among customers. Investor relations can also improve through sustainability efforts. On the other hand, a negative media report on supply chain practices can hurt stock prices.
Some investors would even cut ties with the company. It will depend on how strongly they believe in sustainability. And, of course, there is the aspect of complying with regulatory guidelines.
The impact of sustainability on stakeholders
The term stakeholders covers a wide variety of people. They can, directly or indirectly, influence a company’s development plans and strategies.
These include employees, customers, shareholders and the community as a whole. And within these groups, there are two distinctions. There are the main stakeholders who have a complex relationship with the business. They have certain similarities in expectations, rights and responsibilities.
Secondary stakeholders can influence the business. But, they are not essential to its continued existence.
A study on how stakeholders can influence sustainability in the supply chain shared some interesting ideas.
– Stakeholder pressure on sustainability can lead to greater awareness.
-Stakeholders have an essential role to play in the adoption of sustainable objectives.
-Stakeholder impact is different in key decision areas.
-The issue of sustainability influences the weight of what stakeholders have to say. It could, for example, have more impact depending on whether it is a social or an environmental issue.
Without a doubt, stakeholders have a crucial role to play in sustainability. After all, organizations depend on them for the success of their business.
And, there is the important role of employee or worker feedback. What do they think of what the company is doing in terms of sustainable development? Do they have human rights or labor practice issues they would like to share?
But, a huge challenge remains. Many workers may be unwilling to speak out for fear of retaliation. Finding a way to allow them to communicate anonymously can help.
Some companies will use suggestion boxes. But, employees may be hesitant for fear of onlookers. To counter this, tech companies are automating this feedback process by investing in tools like Ulula.
Ulula is a mobile platform that can help with anonymous surveys. It sends digital questionnaires to stakeholders’ phones. Thus, it allows the collection of data in real time, while respecting the respondents’ preference for confidentiality.
Anonymity helps collect more honest feedback. In addition, the system can identify fraudulent activities, thus ensuring better data quality.
Clarify the role of stakeholders in influencing sustainability
The role of stakeholders in influencing sustainability has three characteristics. These are power, legitimacy and urgency. Stakeholders have the essential role of control and responsibility.
Accountability makes the company accountable for the processes that occur within the supply chain. Control is the ability of stakeholders to regulate some of the company’s activities.
Let’s explore them by looking at some stakeholders.
Government or regulatory authorities
Take the example of government as a stakeholder. They have power, legitimacy and urgency. They can put pressure on the company to adopt sustainable practices.
Failure to adhere to sustainability guidelines may result in the loss of operating licenses. The company may also find itself facing heavy sanctions from the regulatory authorities.
Let’s start by saying that modern customers are very aware. They know the important role of sustainability and are more demanding of it.
Customers have a lot of power. Their influence can be the reason a company adopts sustainable practices. Like government, they have power, legitimacy and can create a sense of urgency.
Take the example of a community demonstrating against corporate pollution. The resulting pressure can force the company to take the right sustainable measures.
Industry giants like Kellogg’s, Coca-Cola, Unilever, Nestlé and PepsiCo understand this well. Behind the brand campaign empowered customers to demand corporate sustainability. This included demanding greater accountability from supply chain actors.
Customers also wanted the ten beverage companies to address gender inequalities. Other areas of interest were climate change and land grabbing. Many companies have changed their process because of the campaign.
They have established zero tolerance for unethical practices within the supply chain. Others, like General Mill and Kellogg’s, have paid more attention to reducing emissions.
What about the media as a secondary player? Well, you may have heard that the pen is mightier than the sword. They have power, legitimacy and can create urgency.
Media is a key driver in sustainability. Not only can they lead companies to change their practices.
But, customers look to them for information. Do you know up to 60% of customers consider the company’s sustainable development practices when purchasing a product?
A third of customers have no problem paying high prices for durable items. This could explain why organic products, although more expensive, are so popular.
We all want to leave our children and their children a healthy environment. And that, in its simplest form, is what sustainability demands. In fact, embracing sustainability within the supply chain may no longer be a choice. In other words, if you want your business to stay relevant.
You see, modern customers are very demanding when it comes to ethical and clean processes. And the same goes for other supply chain stakeholders.