Leading companies are leveraging sustainable supply chains to build a better business
Has sustainability gone out of style?
If you read the headlines, you might come to that conclusion. Governments are rolling back environmental regulations. ESG (environmental, social, and governance) is receiving criticism. And CEOs are saying publicly that sustainability has fallen down their list of priorities.
Or it might just be that, amid global supply chain disruptions, volatile commodity markets, and escalating geopolitical risk, sustainability has simply been crowded out of the conversation.
But sometimes, actions speak louder than words.
The latest Supply Chain Compass research from Blue Yonder reveals that 66% of executives are “actively working to reduce their supply chain’s environmental impact.” Additionally, 56% agree that there is “an onus on supply chain operators to help solve problems like inflation and climate change.”
These findings indicate that, despite the narrative, sustainability remains an important priority in the business world; however, what’s even more encouraging is the reason why.
Sustainability has become an engine for growth.
Leading companies no longer see sustainability as a compliance burden—they recognize it as a business strategy that drives revenue, cuts costs, and builds a competitive advantage.
In this blog, we’ll talk about the importance of sustainability from a business perspective, including its impact on revenue, how to operationalize sustainability across functions, and how a dedicated sustainability team keeps the strategy in motion.
The emphasis on Scope 3 emissions is driving revenue growth
Sustainability has always been a smart business practice that increases efficiency, reduces risk, and makes the supply chain more resilient. Now, it has also become a revenue generator.
A recent survey from Bain found that sustainability is having a significant positive business impact on B2B growth leaders. Half of B2B customers actively give more business to sustainable suppliers, and that percentage is projected to increase in the coming years.
In other words, supply chain sustainability has become more than just a marketing message—it can now be directly tied to sales.
The survey also found that half of the companies prioritize purchases from sustainable suppliers, and nearly 70% plan to accelerate those purchases over the next three years. These buyers said that by 2028, sustainability will be the second-most important purchasing criterion, just after quality.
This shift in priorities also enables companies to pursue more aggressive pricing strategies—with many buyers willing to pay a premium for sustainable products.
Much of this purchasing behavior is driven by an emphasis on reducing Scope 3 emissions, which are emissions directly embedded in products via their supply chain. Companies that recognize and capitalize on this shift in customer priorities are experiencing revenue growth and increasing market share.
Operationalizing sustainability activates the strategy
How can supply chain leaders take advantage of this sustainability revolution? Leading companies are leveraging AI and other advanced technologies to integrate sustainable practices at every stage of the supply chain—operationalizing sustainability as a core business process.
Inventory optimization. AI tools manage stock proactively and in real time, constantly calculating how much product should be at each warehouse location in response to demand changes. This allows supply chains to run lean, saving energy and other resources while ensuring product availability.
Logistics and route planning. By analyzing traffic patterns, weather and road conditions, fuel prices, vehicle capacity, and delivery schedules, AI enables dynamic route planning that avoids delays while reducing emissions.
Transparency and visibility. AI platforms pull together data from diverse sources, such as Internet of Things (IoT) sensors, blockchain records, supplier and other external systems, and shipping trackers, into a single, clear view of the supply chain. Companies then use this information to establish and enforce standards, while demonstrating to customers the veracity of sustainability claims.
Forecasting, scenario planning, and risk modeling. Supply chain datasets are also used by AI, often in conjunction with digital twins, to game out contingencies for potential disruptions and more accurately predict outcomes, thereby boosting the organization's flexibility and resilience.
Product and service design. AI-assisted design practices help companies innovate greener products without compromising on quality or cost.
Energy efficiency. AI analyzes operational data to identify and target emissions hotspots, execute predictive maintenance to prevent waste and loss, and improve the load balance of energy networks.
Dedicated sustainability roles keep the strategy on track
While operationalization across functions is the foundation, if the sustainability strategy becomes too diffuse, there is a risk that sustainability goes adrift, becoming a byproduct or an afterthought. Having specialized sustainability roles embedded across the supply chain will help keep the strategy on track.
That’s why leading companies also create dedicated sustainability teams to maintain the organization’s focus.
“Large organizations with more than $500 million in revenue are investing in dedicated sustainability teams instead of adding the responsibility to the long list of priorities for a CEO,” explains Saskia van Gendt, Chief Sustainability Officer at Blue Yonder.
Here are some principles to keep in mind when building the sustainability team.
Consider a cross-functional team structure. Integrating sustainability roles across diverse functions keeps everyone in the supply chain aligned on the same objectives. For example:
- Supplier Liaison: These procurement specialists work closely with suppliers on sustainability requirements.
- Logistics and Distribution Specialist: works with the Warehousing and Transport teams to track emissions and maximize AI capabilities.
- Circular Economy Advisor: Works closely with Manufacturing and Returns functions to create a closed-loop system where reuse, recycling, and repair are used to source materials.
Establish objectives and governance. Sustainability priorities will vary based on the business, but these principles will work for everyone:
- Identify the most promising opportunities for sustainability improvement—start with the low-hanging fruit to get quick wins and build credibility with customers.
- Define KPIs that are easy to understand and that can be applied broadly across the supply chain.
Create an incentive structure that empowers both internal teams and external suppliers to control their own destiny in terms of sustainability—rather than focusing on compliance or punishment.
Sustainability has become a competitive differentiator
Leading companies are doing the real work of sustainability because it is the right thing to do for the environment, and for their business. Sustainability is no longer about appeasing regulators or investors—its about building a better world for themselves and their customers.
Once sustainability becomes part of a company’s DNA, it is no longer a burden. It’s a dynamic capability that helps to build a better business.
