Source: MAERSK

In order for businesses to succeed in the future, sustainability needs to be at the core of all of the companies’ functions. In fact, Deloitte reports that companies that don’t integrate sustainability into their business models now will end up bearing even greater costs later, explaining that “climate inaction could cost the global economy 178 trillion USD over the next 50 years. On the other hand, it could gain 43 trillion USD over the same period by rapidly accelerating the transition to net-zero.”

While sustainability goals and actions are imperative to businesses’ longevity, companies should aim to work with external providers that also have robust sustainability initiatives, in order for their entire supply chain to be future-proof. By working with a sustainable logistics provider companies can not only ensure that all links in their supply chains are sustainable, but they can experience a range of additional benefits for their business, proving that sustainability is not in tension with business growth.

1. Recruitment of the next generation of talent

It has been shown that the next generation, Gen Z, is the largest of all time. That means that in the fight for talent, companies that can attract younger workers are likely to be more well-equipped for future growth. So why is sustainable logistics important in the fight for talent?

Gen Z reportedly experiences higher levels of ‘eco-anxiety’ than the preceding generations, and many are tackling these anxieties by working for companies that are making positive changes. A 2018 study by Deloitte found that 77% of Gen Z respondents felt that it was important to work at an organisation that shares their values, and United Kingdom-based health insurance company, Bupa, found nearly two-thirds of 18 to 22 year olds consider it important for their employers to act on environmental issues. Gen Z is also particularly adept at digital research, very capable of finding out if a potential employer is engaging in greenwashing, and not truly integrating sustainability into the core of their business and every step in their supply chain.

Thus, as a generation more concerned and affected by climate change than all preceding generations, companies that integrate sustainability into their supply chains will be attractive to these digitally-native workers.

2. Sustainable transportation and logistics for environmental compliance

Not only will companies that partner with a sustainable logistics partner be up to speed with the latest talent, but they will also be able to benefit from an ease of compliance with environmental regulations.

At the supranational and national levels, carbon emissions tracking and reporting is increasingly becoming mandatory and expected. In addition, regulations are becoming more and more widespread that limit the volume of emissions. For example, the Paris Agreement, signed in April 2016 by 196 parties, has led to numerous emissions reduction goals for the members of the United Nations Framework Convention on Climate Change. These initiatives are encouraging national governments to make companies more accountable for their emissions, however, this is largely only the first step in the process.

Nations, organisations, and companies that aim to take their commitment to sustainability to the next level are taking emissions regulations one step further, mandating that companies not only track, report, and aim to minimise their Scope 1 and 2 emissions (emissions in which their production is directly responsible, in addition to the power utilised to produce and operate), but also their Scope 3 emissions. Scope 3 emissions are emissions that are not produced by the company itself, but by their suppliers up and down their value chain.

These regulations introduced by the International Sustainability Standards Board now show the importance and business value in partnering with a sustainable logistics supplier. Working with a logistics provider that tracks, reports, and minimises emissions in every step of the supply chain now, means that companies will be more resilient and flexible when increased regulations are introduced.

3. Worker protections and social sustainability in logistics

Adhering to environmental regulations is only part of the sustainability that responsible logistics providers take into account. Perhaps less publicised, but equally important, is the social sustainability at the core of businesses around the world.

As mentioned earlier, the next generation of consumers is particularly adept at spotting when companies just ‘talk the talk’ and don’t ‘walk the walk’. In fact, a 2021 survey conducted by McKinsey found that 88% of Gen Z’ers don’t believe companies’ environmental, social, governance claims. Therefore, it is imperative that companies make sure that all of their partners and suppliers are focused on creating a socially sustainable workplace for their staff. When companies partner with a sustainable logistics provider they can rest easy, knowing that they will not be associated with any scandals involving poor, exploitative, or unsafe working conditions; and they can truly ‘walk the walk’ of their ESG claims. 

4. Sustainable growth with sustainable logistics

While prioritising sustainability is arguably the ‘right’ thing to do for the planet, it is increasingly a standout way to build better brand image and gain an advantage over competitors. A recent report by First Insight has found that consumers across all generations, from Gen Z back to Baby Boomers, are willing to pay more for sustainable products. These statistics have increased significantly in recent years, just two years ago only 34% of Gen X was willing to spend up to 10% more for sustainable products, but now that proportion has grown to 90%.

However, while consumers want more sustainable solutions, they are also wary of greenwashing and false promises. This means that all claims must be backed up with action, and companies should be mindful of the ways in which they are not delivering sustainable products and services to the best of their abilities. One way for companies to ensure that their products are reaching their customers in a sustainable way is to partner with a sustainable logistics provider that tracks and traces emissions in all steps of their supply chain. This level of transparency allows companies to be radically honest with their customers, minimising the risk of greenwashing claims as both company and consumer is informed.

Companies that partner with sustainable logistics providers can use transparency and responsible business practicles to build meaningful relationships with their customers, engendering a trust that will lead to brand loyalty and sales for years to come.