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The Sustainability Struggle: Succeeding in a Carbon-Neutral Supply Chain

and on October 6, 2021
Resources All Managing Change

Sustainability is on every company’s radar these days. It represents opportunity as much as it does challenge. Those who can harness the opportunities are the ones who will solidify their spots as leaders. But pivoting to a thought-out carbon-neutral plan isn’t easy. Organizations must address multiple stakeholders in sustainability conversations, and each stakeholder expects action to address their own specific interests. Put simply, the complexity of sustainability is daunting, as the collaboration of many is required for a single organization to enact a comprehensive sustainability plan. All too often, a single organization’s urgency ends up taking precedence, creating a domino effect that results in a plan that isn’t as nearly as effective as intended. But how do we solve this problem?

The Pressure to Deliver Is High

Sometimes the survival of your organization depends on goals that your leaders didn’t even set.

Let’s take the auto industry, for example. Automakers can always find their way into the headlines. Lately, they’ve accomplished this by setting ambitious goals to achieve a carbon-neutral footprint. Their original goal was to accomplish this by 2050; more recently, that date has been moved up to 2039. We’ve seen automotive clients become laser-focused on electrification and setting target dates for carbon neutrality to serve as forcing functions up and down their supply chains. These strategies are here to stay. The message from OEMs to suppliers is clear: help us achieve emissions targets or don’t plan on staying in our supply chain.

Imagine you are a tire manufacturer. Your largest customers are making commitments to carbon neutrality. You’ve effectively been handed a corporate imperative to help them achieve the sustainability goals they set. To be invited to the table as a supplier, you must be contributing to achieving these new targets. That’s just table stakes. Once you’re in consideration as a supplier, you have to then compete with other tire manufacturers who are likely setting aggressive targets themselves. Do they already have more advanced technology that allows them to deliver? Or are they betting they can figure it out by the time they need to deliver? The bar keeps getting raised and the pressure keeps building as everyone simultaneously races to meet new, more aggressive goals.

Tire manufacturers may be an easy example, given their obvious dependence on OEMs. Equally important but a bit less obvious are companies such as public utilities that provide electricity for energy-hungry manufacturing operations. The expectations from those OEMs will be similar for utilities. Carbon-neutral goals extend back to the sources of the power they use. Utilities must diversify their production portfolios to answer to this carbon-neutral requirement while also maintaining a steady and reliable supply of energy. If they cannot deliver on these requirements then, just as in the tire industry, the manufacturer will find other options. These examples represent what’s happening across all industries, and organizations are putting pressure on suppliers to deliver eco-friendly options to meet consumer demands.

The Right Employee Experience Can Help Organizations Meet Demanding Goals

There are consistent themes in how companies are achieving emission mandates. Key ingredients include a greater level of service, an increased focus on the customer, and engaging employees to provide a friendly and flexible employee experience. Because the war for talent is here to stay, it’s critical that organizations create cultures that offer the socially conscious standards that today’s employees want from their employers. And because organizations are asking more of their employees to meet the new demands of sustainability plans, it’s imperative that they create environments that foster employee happiness and wellbeing. This will directly impact employees’ work efforts and output.

Beyond an increased focus on employee experience, it’s more important than ever for organizations to work in close partnership with all of their stakeholders, because goals and perspectives must be aligned. Nothing can be left to chance.

The Time to Solidify Your Sustainability Strategy Is Now

Be a leader, and you create opportunities. Fall behind, and you’re putting your business at risk, because there are undoubtedly competitors ready to capitalize on your hesitation. Becoming an organization that prioritizes sustainability isn’t just a nice-to-have; it’s a must-have. What are you doing to tell your sustainability story? How are you engaging your stakeholders in your sustainability journey to ensure that all parties are working together to achieve your goals? The time to hone this part of your organization’s strategy is now.

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