Economies are demanding supply chain transparency. The good news - it’s possible today.
4 March 2022 - Our global economy is demanding transformative change within our supply chains. Increasingly unpredictable environmental, economic, and political events continue to expose the world’s supply chain instabilities that are leaving us vulnerable.
Creating transparent supply chains overcomes many of these vulnerabilities by helping us meet ESG, GHG, and responsible sourcing standards, as well as build secure, efficient, domestic supply chains. However, in a new report by the NewClimate Institute, it seems many of the world’s largest companies are currently “failing to take significant enough steps to meet their pledges to reduce the impact of their GHG emissions”.
There is no denying that it is complicated, but with consumers, investors and governments all striving for net-zero, organisations recognise they need to do more. At Circulor, we are already seeing first-hand, how our customers understand their role as societal engines for change and are setting entirely new ESG standards using our technology, including Britishvolt and BHP.
As consumers, we increasingly want to put our money behind brands that make a difference. Ethical and sustainability issues remain a key driver for almost a third of consumers, who according to a report by Deloitte, claim to have stopped purchasing certain brands due to related concerns. This backed by a paper written by The World Economic Forum on the Net-Zero Challenge: The Supply Chain Opportunity, that “over the past five years, consumer demands for sustainable products grew 7 times faster than conventionally marketed counterparts”, proving the financial value of organisations producing ‘green products’.
Investors also recognise their role as long-term stewards of capital. Importantly, they are considering if the companies they finance today will maintain a strong connection with both their customers and economies. Although ‘doing good’ is likely a key driver, “ESG funds in Europe are forecasted to outnumber conventional funds by 2025 and assets in sustainable investment products in Europe are expected to reach €7.6 trillion”, according to a report by PwC on ESG Finance. This is yet another reason why organisations should care about improving their ESG performance; access to finance in the future.
Every week we hear about the new proposals and commitments from policy makers to drive net-zero; from setting new emissions standards, to responsible sourcing due diligence and circularity mechanisms. Examples include theEU’s “Fit for 55” which requires a 55% reduction in emissions by 2030 to achieve The European Green Deal, or the EU Battery Directive which aims for 17% of the global battery supply chain to be in Europe. Globally, under the Biden Administration, the U.S. has set emissions reduction targets of 50-52% economy-wide by 2030 and in Asia, both Japan and South Korea have pledged to achieve net-zero carbon emissions by 2050, and China by 2060 according to an article by CNBC on the Net Zero Could Cost Asia Trillions.
Whilst it’s positive to see a major shift from voluntary initiatives to binding legislation, and to see increasing pressure from investors and consumers, organisations need the ability to prove their materials source and the emissions, in real-time. Circulor offer the most complete and mature solution to this by enabling companies to gain visibility into their supply chains to improve ESG performance, reduce GHG emissions and demonstrate responsible sourcing and recycling.