The retail industry is struggling to keep pace with consumers’ growing expectations of sustainability. Two-thirds of consumers, including 75% of millennials, report they consider sustainability when shopping, yet most brands and retailers have failed to ensure the complete integrity of the primary contributor to their social and environmental footprint: their supply chains. According to McKinsey, supply chains account for up to 90% of a company’s environmental impact, underscoring the need for greater visibility and oversight.
Heightened consumer awareness about the global impact of their purchases, along with a tidal wave of strict new supply chain laws passing around the world, has placed a spotlight on the urgent need for transparency and accountability in sourcing practices. In response, retailers are rapidly turning to multi-enterprise supply-chain platforms, cloud-based solutions that are revolutionizing supply-chain efficiency and sustainability.
This technology creates a panoramic, realtime view of the supply chain, from raw materials to manufacturing and shipping. By facilitating the seamless exchange of critical ESG (environmental, social, and governance) data among all stakeholders, it lays the groundwork for comprehensive sustainability initiatives, enabling brands to monitor suppliers, ensure compliance with global sustainability standards, and to create visibility into every tier of the supply chain, mitigating ESG risks.
The benefits of digitalization are extensive and far reaching. For instance, it can streamline the supplier management process, allowing brands to efficiently monitor suppliers’ certifications, audits, and compliance protocols. These capabilities are vital in a landscape where one oversight can cause a company irreparable reputational damage. Moreover, by integrating sustainability metrics into the product development process, digitalization allows brands to track their progress toward their sustainability goals in realtime. A comprehensive platform like TradeBeyond can even allow businesses to measure and reduce supplier carbon emissions, empowering them to harness the power of data to implement Scope 3 reduction initiatives effectively and align operational practices with global climate goals.
A critical feature of the most advanced supply-chain platforms is their ability to provide multi-tier visibility. This is essential for ensuring compliance with stringent ESG standards and complying with global regulations including the United States’ Uyghur Forced Labor Prevention Act, the LkSG (German Supply Chain Act), and the EU’s Corporate Sustainability Reporting Directive, which require companies to have a complete view of their supply chain down to the Nth tier. The adaptability of this technology creates a significant advantage for businesses aiming to stay ahead of the curve. These systems are designed to accommodate new compliance requirements seamlessly, ensuring companies can quickly adapt to changes without overhauling existing processes and workflows.
As the retail industry navigates the complexities of sustainable sourcing, the role of technology cannot be overstated. Digitalization offers a proven solution to the myriad challenges facing the industry. This technology empowers brands not only to meet their sustainability goals but also to foster a culture of transparency and responsibility that resonates with today’s conscious consumers. The journey toward sustainability is long and complex, but by creating efficiencies and cutting costs while ensuring responsible sourcing, multi-enterprise platforms can transform obstacles into opportunities, paving the way for a future where retail success and social and environmental stewardship go hand in hand.
For more than 25 years, TradeBeyond CEO Michael Hung has focused on developing software and solutions that streamline business processes for leading retail, manufacturing, and financial services organizations. Prior to co-founding TradeBeyond, he consulted for a range of clients and industries with Lotus Consulting, now part of IBM.