Sustainability Gaps Revealed As One-Third of Global Organizations Neglect ESG KPIs
Less than half of G2000 businesses will operationalize integrated sustainability in supply chains by 2026
In the 2023 Gartner Future of Supply Chain survey, one-third of the respondents said that their organization had not define any environmental and social sustainability KPIs for supply chain leaders despite visibility and transparency becoming “non-optional” for organizations. Gartner analysts said that organizations must “establish auditing procedures and extend them to suppliers and other external partners to capture the full impact of their efforts.”
As the environmental regulations increase and customers favour sustainable organizations, companies are increasingly being called upon to demonstrate their commitment to Environmental, social, and governance (ESG) reporting. It is becoming increasingly important and urgent as investors and regulators seek to understand the long-term resilience of companies in regards to their environment, social, and ethical performance, particularly in supply chain activities.
Organizations need to incorporate environmental considerations into their supply chain management. This means that each supply chain step, from materials management and transportation to the end customer, needs to be structured with environmental awareness in mind. Not only will it help to protect the natural ecosystem, but it will also provide a competitive edge to companies in terms of corporate reputation and operational performance. IDC researchers predicted that by 2026, only 45% of G2000 organizations will operationalize integrated sustainability in the supply chain and effectively report impact data. This shocking statistic reveals a significant gap for more than half of global businesses to address in meeting the increasingly need for supply chain sustainability.
While many governments and economies have started mandating ESG reporting such as the UK’s Taskforce on Climate-related Financial Disclosures (TCFD), nations in the region have only begun to utilize these frameworks in recent years. Furthermore, businesses are not placing enough emphasis and are lacking guidance in their supply chain sustainability programmes.
Creating a Sustainable Future for Global Supply Chains
TAPA APAC is continuously monitoring developments in ESG reporting regulations and their implications for our members. TAPA’s overarching mission is to improve resilience and sustainability of members’ supply chains. To further this goal, TAPA APAC continues to create new Standards to address these gaps and knowledge sharing opportunities amongst member companies through working groups, publications, events and conferences.
References
2023 Gartner Future of Supply Chain survey https://www.forbes.com/sites/sap/2023/02/06/supply-chain-trends-2023-risk-resilience-beats-transformation-every-day-of-the-year/?sh=10e2b0948160
IDC research