{"id":427132,"date":"2022-10-19T23:37:51","date_gmt":"2022-10-19T23:37:51","guid":{"rendered":"https:\/\/uat.esri.com\/en-us\/industries\/blog\/?post_type=blog&#038;p=427132"},"modified":"2025-04-07T22:19:31","modified_gmt":"2025-04-07T22:19:31","slug":"understanding-the-climate-and-societal-impact-from-global-supply-chains","status":"publish","type":"blog","link":"https:\/\/www.esri.com\/en-us\/industries\/blog\/articles\/understanding-the-climate-and-societal-impact-from-global-supply-chains","title":{"rendered":"Understanding the Climate and Societal Impact from Global Supply Chains"},"content":{"rendered":"<p class=\"undefined block-editor-paragraph\">During the USC 10<sup>th<\/sup> Annual global supply chain Summit, I had the pleasure to host the panel \u201cCorporate Responsibility and Sustainability\u201d with industry innovators and advocates Rakhi Agarwal, Sanofi \u2013 AVP of Supplier Diversity, Procurement Sustainability and Risk Management; James Schaeffer, Higg \u2013 Chief Strategy Officer, and Christian Piller, Project 44 \u2013 VP of Research and Sustainability.&nbsp;<\/p>\n\n<p class=\"undefined block-editor-paragraph\">In this panel, we wanted to rigorously discuss how organizations can move beyond being interested in sustainability and corporate responsibility to Substantial Action \u2013 and in particular as it relates to the global supply chain of goods and materials for the expansive body of products that are consumed by our communities, individuals, businesses, etc. &nbsp;We discussed the value of collective action and collaborative partnerships to scale the innovation and change needed to meet aggressive goals to reverse climate impact.&nbsp;<\/p>\n\n<p class=\"undefined block-editor-paragraph\">A second key factor in scale is the future of the workforce \u2013 both today\u2019s business leaders and the next generation of supply chain professionals \u2013 who have a pivotal role in reversing the impact.<\/p>\n\n<p class=\"undefined block-editor-paragraph\">To open the panel, I assembled a few critical facts to set the stage for the discussion (link to slide presentation).<\/p>\n\n<p class=\"undefined block-editor-paragraph\">The impact of the supply chain of finished goods is often misunderstood by the average consumer or business professional. &nbsp;Impact is a result of compounding contributions across the value chain of the final products and services produced \u2013 it\u2019s wildly complicated and hard to grasp the magnitude of volume of \u201cstuff\u201d that goes into finished goods consumed globally &#8211; everyday. &nbsp;<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Up to 90% of an organization\u2019s environmental impact lies in the value chain(Carbon Trust)\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.carbontrust.com\/what-we-do\/measure-and-evaluate\/value-chain-and-supply-chain-sustainability\">Value chain and supply chain sustainability<\/a><\/li>\n<\/ul>\n<\/li>\n\n<li>80 to 90%&nbsp; of greenhouse-gas emissions are \u201cScope 3\u201d: indirect emissions that occur across the company\u2019s value chain (McKinsey &amp; Co)\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.mckinsey.com\/business-functions\/operations\/our-insights\/buying-into-a-more-sustainable-value-chain\">Buying into a more sustainable value chain<\/a><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n<p class=\"undefined block-editor-paragraph\">This diagram is well-known in sustainability circles (this version from Sustain Lab) indicates the broader impact of upstream and downstream Scope 3 (Indirect) \u2013 and this is the most troubling contributions of supply chain traceability and transparency \u2013 as most of the world\u2019s brands can\u2019t trace materials much beyond the first tier of their supply chain.&nbsp; The further away from the reporting company a supplier or provider is, the less likely their impacts are being accurately incorporated into an organization\u2019s reporting or understanding of their impact.<\/p>\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"606\" src=\"https:\/\/uat.esri.com\/en-us\/industries\/blog\/wp-content\/uploads\/2022\/10\/sustainlab-1024x606.png\" alt=\"\" class=\"wp-image-428602\" srcset=\"https:\/\/www.esri.com\/en-us\/industries\/blog\/app\/uploads\/2022\/10\/sustainlab-1024x606.png 1024w, https:\/\/www.esri.com\/en-us\/industries\/blog\/app\/uploads\/2022\/10\/sustainlab-300x178.png 300w, https:\/\/www.esri.com\/en-us\/industries\/blog\/app\/uploads\/2022\/10\/sustainlab-768x454.png 768w, https:\/\/www.esri.com\/en-us\/industries\/blog\/app\/uploads\/2022\/10\/sustainlab-1536x909.png 1536w, https:\/\/www.esri.com\/en-us\/industries\/blog\/app\/uploads\/2022\/10\/sustainlab.png 1896w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\"><a href=\"https:\/\/sustainlab.co\/blog\/what-are-scope-1-2-3-emissions\">Source link<\/a><\/figcaption><\/figure>\n\n<p class=\"undefined block-editor-paragraph\">Scope 3 emissions impact widely varies based on industry, as shown here in this diagram by Envizi (an IBM company).&nbsp; The more the goods and services of a brand or industry depend on multi-tiered suppliers and distribution channels, the higher the percentage of Scope 3 comes from supply + value chain.&nbsp; Easily recognized is the impact specifically from the sourcing of \u201cPurchased Goods and Services\u201d \u2013 indicating the substantial Scope 3 impacts from materials that are grown, assembled, distributed and disposed throughout a product\u2019s lifecycle &#8211; which could be from days (ie: food products) to many years (ie: HVAC).<\/p>\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"513\" src=\"https:\/\/uat.esri.com\/en-us\/industries\/blog\/wp-content\/uploads\/2022\/09\/2022-09-14_10-27-29-1024x513.png\" alt=\"\" class=\"wp-image-427142\" srcset=\"https:\/\/www.esri.com\/en-us\/industries\/blog\/app\/uploads\/2022\/09\/2022-09-14_10-27-29-1024x513.png 1024w, https:\/\/www.esri.com\/en-us\/industries\/blog\/app\/uploads\/2022\/09\/2022-09-14_10-27-29-300x150.png 300w, https:\/\/www.esri.com\/en-us\/industries\/blog\/app\/uploads\/2022\/09\/2022-09-14_10-27-29-768x385.png 768w, https:\/\/www.esri.com\/en-us\/industries\/blog\/app\/uploads\/2022\/09\/2022-09-14_10-27-29-1536x769.png 1536w, https:\/\/www.esri.com\/en-us\/industries\/blog\/app\/uploads\/2022\/09\/2022-09-14_10-27-29-2048x1025.png 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n<p class=\"undefined block-editor-paragraph\">The impact to the environment because of the supply chain is not the only concern.\u00a0 The societal risk posed due to <a href=\"https:\/\/www.esri.com\/en-us\/about\/climate-action\/overview\">climate risk<\/a> is equally catastrophic.\u00a0 In a recent Accenture report, their research indicates that up to 40% of the labor force will be disrupted due to climate change and environmental degradation.\u00a0 Meaning that as farmers, suppliers, transportation and factories are faced with severe weather incidents \u2013 such as fires, tsunamis, floods, droughts and others \u2013 and\/or overall loss of natural resources \u2013 biodiversity, safe water or good air quality and\/or geopolitical and public health risks \u2013 those organizations and their workforce and their communities will be severely disrupted causing ripple effects of lost jobs with demise of the community well-being overall.<\/p>\n\n<p class=\"undefined block-editor-paragraph\">The Accenture report reinforces that the more organizations operate sustainably and responsibly throughout its products lifecycle, the better the outcomes for society, the planet and the longevity of the company overall.&nbsp;<\/p>\n\n<p class=\"undefined block-editor-paragraph\">In closing, there are many variations of this Venn diagram, but I chose this view of the S-E-E (Society, Environmental and Economic) Model to demonstrate that the most viable and high performing organizations will embrace the collective strategy to equally prioritize the business metrics that strengthen all pillars of the S-E-E Model.<\/p>\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"456\" src=\"https:\/\/uat.esri.com\/en-us\/industries\/blog\/wp-content\/uploads\/2022\/09\/SEEmodel-1024x456.png\" alt=\"\" class=\"wp-image-427192\" srcset=\"https:\/\/www.esri.com\/en-us\/industries\/blog\/app\/uploads\/2022\/09\/SEEmodel-1024x456.png 1024w, https:\/\/www.esri.com\/en-us\/industries\/blog\/app\/uploads\/2022\/09\/SEEmodel-300x134.png 300w, https:\/\/www.esri.com\/en-us\/industries\/blog\/app\/uploads\/2022\/09\/SEEmodel-768x342.png 768w, https:\/\/www.esri.com\/en-us\/industries\/blog\/app\/uploads\/2022\/09\/SEEmodel.png 1388w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\"><a href=\"https:\/\/www.algonquincollege.com\/sustainability\/overview-2\/our-framework\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Source link<\/a><\/figcaption><\/figure>\n\n<p class=\"undefined block-editor-paragraph\">Today\u2019s leaders and developing professionals uniquely have the ambition and innovative capacity needed to adapt business practices to address and reverse climate impacts \u2013 by onboarding new skills and technology, but also with partnering and collaborating across industry, associations and others.&nbsp; To contextualize their networks \u2013 people and places, measure outcomes and outputs for areas for improvement, and model out 5 or 10 years to know where to prioritize adjustments needed.&nbsp; Businesses truly have to adapt and redesign business processes. &nbsp;Adapting business will help leaders discover what can be done to create more sustainable and regenerative practices, help consumers better understand the sources of their goods, and to lessen and\/or repurpose overproduction and discards (waste).<\/p>\n\n<p class=\"undefined block-editor-paragraph\">See below to watch the full panel discussion!<\/p>\n\n<figure class=\"wp-block-embed is-provider-youtube wp-block-embed-youtube\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Plenary Panel-Corporate Social Responsibility &amp; Sustainability\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/Rj1JReXyLSQ?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>","protected":false},"author":242,"featured_media":0,"parent":0,"menu_order":0,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[891],"tags":[1952,344,127],"class_list":["post-427132","blog","type-blog","status-publish","format-standard","hentry","category-supply-chain","tag-business","tag-corporate-social-responsibility","tag-supply-chain","industry-commercial-business"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.9 (Yoast SEO v25.9) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Understanding the Climate and Societal Impact from Global Supply Chains<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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