The challenge lies in measuring, tracking, and implementing these pledges effectively
In the face of rising global temperatures and increasing carbon emissions, companies worldwide are making ambitious pledges to reduce their carbon impact.
However, one of the significant challenges they encounter is effectively measuring and managing sustainability across their supply chains, affirms Hasneen Sheela Shereef, Head of Marketing & Communications, MEA, TCS in the Middle East, Africa, and Mediterranean region, in this special Opinion Piece.
In this article, Tata Consultancy Services through its study with Microsoft explores the importance of transparent supply chain measurement and its role in driving the transition to net-zero business ecosystems.
The Urgent Need for Sustainable Development:
Over the last several decades, carbon emissions have soared, leading to a significant rise in average global temperatures. To combat this, it has become widely acknowledged that achieving a shared global goal of cutting carbon emissions by 45% in the next 20 years is crucial for sustainable development.
Encouragingly, businesses are stepping up, with companies pledging to use 100% renewables and avoid investing in deforestation-linked activities. However, the challenge lies in measuring, tracking, and implementing these pledges effectively.
The Struggle to Measure Supply Chain Sustainability
To evaluate how companies are managing their sustainability initiatives, TCS and Microsoft collaborated to research and analyze publicly available data. The findings revealed that enterprises, regardless of size and revenue, are increasingly conscious of sustainability.
However, they face difficulties in measuring the value of decarbonization efforts within their supply chains. This knowledge gap emphasizes the need for improving the quality of global supply chain data to accurately measure and understand their carbon footprints, thus bridging the missing link to a net-zero business ecosystem.
Insights from Industry Analysis
Through an examination of public data from 400 companies, several insights emerged. Approximately 51% of the analyzed companies actively participate in the Dow Jones Sustainability Index, demonstrating their commitment to sustainability. Moreover, 52% of the companies publicize climate action.
However, most of the companies struggled to validate data and insights related to their supply chain emissions. Industries such as manufacturing, energy, retail, and consumer goods showed higher disclosure rates, indicating a strong desire to lead and influence sustainability practices.
Reimagining Supply Chains
While only 16% of the analyzed companies have publicly set science-based targets for operational carbon emissions, a mere 11% have committed to science-based targets for their supply chains.
To address this, a shift towards reimagining supply chains is essential. Companies must focus on reducing carbon emissions associated with products and packaging, which often account for a significant portion of overall emissions. Transforming global supply chains can be a pivotal step toward more sustainable practices.
Transparency for ESG
Consumers are increasingly seeking credible product labels to make informed decisions about the products they purchase. Studies have shown that sustainability labels are desired by consumers, and businesses are responding by adopting carbon labels and ecological rating systems.
Aligning sustainability goals positively impacts public perception and, ultimately, financial performance. This demonstrates the need for transparency in supply chains to build trust and accountability.
Leveraging Technology at Scale
Managing sustainability-related risks and opportunities necessitates the establishment of core infrastructure and technology capabilities. Supply chain sustainability data is often fragmented and stored in spreadsheets, making it challenging to ensure accuracy and governance.
Digitalization and digital transformation play crucial roles in addressing these challenges. Cloud adoption offers organizations a significant step toward achieving net-zero emissions, alongside cost savings, operational efficiency, business agility, and innovation.
Building Competitive Supply Chain Data
To create a competitive supply chain data ecosystem, organizations must aggregate, wrangle, augment, and curate data from suppliers into a single source of truth. This comprehensive information allows for accurate recording, analysis, and visualization of emissions and environmental.
One of the examples of a company that is known for developing sustainable projects and initiatives is Masdar in the UAE. The company has built Masdar City, which is a carbon-neutral and zero-waste city.
Measuring and managing sustainability across supply chains is complex yet crucial for companies committed to achieving a net-zero future. Leveraging supply chain data allows organizations to gain deeper insights into their environmental impact and identify areas for improvement.
Collaboration, transparency, and technological advancements play key roles in driving the sustainable transformation of global supply chains. With concerted efforts, businesses can pave the way toward a more sustainable and prosperous future.
BOX OUT:
With over 30 years in the industry, 29 within TCS itself, Sumanta Roy’s career expands over several industries including finance, insurance, and utilities.
Sumanta spearheads multiple large transformation programs in his quest towards making TCS the biggest brand in the MEA region.
Currently based in Dubai, Sumanta has travelled around the globe to spearhead numerous critical projects for TCS. These roles include Head of Sales for Indian region, Head of BPS for North America, Regional Manager for Midwest US (based in Ohio), and Head of Products for India sub-continent.
During his time as the Head of Resource Acquisition Group, he drove the TCS IPO process in its entirety, making it the largest IPO process in India.
Sumanta, an accomplished orator, holds an MBA degree in Marketing and is currently pursuing a formal course on Arbitration from the Chartered Institute of Arbitrators.
