Supply Pilot CEO James Butcher warns retailers not to wait until laws force action on net zero goals, but to seek marginal gains across entire value chain
As the COP27 climate conference in Egypt drew to a close (November 18), a leading supply chain professional warns that the event is unlikely to see any meaningful change in sustainability behaviours among businesses.
“The COP event inevitably causes retailers and brands to take a ‘wait-and-see’ approach about any resulting policy change, rather than tackling energy commitment challenges head on,” says James Butcher, CEO at Supply Pilot, which helps businesses work more effectively with suppliers.
Although year on year the COP conference has grown in significance and visibility since the Paris Agreement of 2015, Butcher says that without “concerted legislative action to follow through on the promises” it remains “a talking shop for country-level commitments that are too focused on energy consumption”.
Butcher adds: “It is policy not promises that drives change. Brands and retailers will wait on change to become mandated before taking action.”
He cites the UK Plastic Packaging Tax as evidence of this. During the pandemic the British government put this legislation on ice rather than getting a head start for when the legislation came into force. “Brands and retailers pumped the brakes on their own changes,” says Butcher.
He adds: “Every five weeks brings us 1% closer to the 2030 target of reducing global emissions by 45%, set out in the Paris Agreement as a key waypoint on the journey to net zero.
“By stalling, businesses create inertia at a vital time for net zero targets.”
Butcher urges businesses to study their entire supply chain and “start making the small gains needed to make an immediate difference”.
No silver bullet for supply chain sustainability
“It’s all about marginal gains,” says Butcher. “There is no silver bullet that is going to magically make all supply chain processes sustainable. The key is identifying where to work with suppliers in achieving the small gains that can add up to significant results.”
Butcher adds that the marginal-gains approach is only successful when applied across the board. He says too many organisations focus on the 80-20 rule, with the 20 being too dominant.
“Historically, businesses have tended to focus most effort on working with the top 20% of its suppliers,” he says. “This means those smaller suppliers that typically need the most help are left behind.”
He adds that this is also “an ineffective way of encouraging sustainable practices throughout the supply chain”.
Butcher points out that, if top suppliers are taking 30 years to reach their net zero goals, “then how long will it take the rest?”
“This is why organisations must work with the entire supply chain, or they risk leaving behind a significant section of suppliers, many of whom will have great ideas on how to address sustainability challenges”.
Butcher says: “Major retailers have thousands of suppliers, and if incremental improvements are made across each of them the results will improve exponentially over time.”
He adds that only by working in such a “scalable” fashion will businesses “find themselves in the best possible position when the promises and processes of COP27 become policy and set them on the right path towards becoming more sustainable”.