Lecture 1: Science of Sustainability

Chapter 2
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Sustainability
• Sustainability has been a growing concern for businesses in recent years, and this trend is likely to continue into
2023, 2024 and beyond.

• Companies are increasingly recognizing that their operations have a significant impact on the environment and
that they have a responsibility to minimize their carbon footprint and reduce their environmental impact.

• This could involve a range of measures, such as:

• Reducing the use of single-use plastics and packaging materials

• Increasing the use of renewable energy sources in the supply chain

• Implementing eco-friendly transportation and logistics practices

• Supporting sustainability initiatives in the supply chain, such as sourcing materials from environmentally
responsible suppliers

• Developing and promoting products and services that have a lower environmental impact
https://alltechmagazine.com/trends-shape-supply-chain-strategy-in-
 Sustainability
• The most popular definition of sustainable development is from the World
Commission on Environment and Development in 1987:

“Development that meets the needs of the present without compromising

the ability of future generations to meet their own needs.”
 Sustainability

(1) capable of being sustained, ie of economic development, energy sources, etc, and
(2) capable of being maintained at a steady level without exhausting natural
resources or causing severe ecological damage, ie sustainable development.
Collins English Dictionary (1998)

• These two separate meanings highlight an important point that ‘green is green’,
ie a firm’s sustainability initiatives for the natural environment, or being green,
need to be considered in conjunction with the economic case for long-term
firm corporate sustainability, ie green being the colour of money.
Sustainability
 Sustainability is linked to corporate social responsibility, as a socially
responsible firm should ensure its impact on the natural environment
is minimized.
 But CSR goes beyond the natural environment to include aspects of
fair trade, good employment practices, and appropriate relationships
with customers, suppliers and other stakeholders.
Sustainability

• John Elkington’s (1994) ‘triple bottom line’ or TBL concept encompassing

profits, the planet and people. The TBL posits that firms should focus on
maximizing shareholder wealth or economic value they create while
ensuring that they also add environmental and social value to achieve
long-term natural environment security and proper working and living
standards for all human beings.
Sustainability pillars (3 pillars of sustainability every company
should follow. | Plastic Packaging Technologies, LLC, 2020)

• The literature initially characterised sustainable development as a three-dimensional concept:

economic, social, and ecological, the triple bottom line or the 3P approach (profit, planet, and
people) was later expanded into a 5P model, which included partnership and peace as well.

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Ecosystems and Environmental Phenomena

 The six major greenhouse gases (Shaw et al, 2010) include CO2, methane (CH4), nitrous oxides
• Climate change
(N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC) and sulphur hexafluoride (SF6).
• Global Warming
• Greenhouse gases  CO2 is the most significant of these greenhouse gases and is the main contributor to global
warming.

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 https://aast.edu/en/sdg/

Sustainable Development Goals SDGs

The Sustainable Development

Goals (SDGs) have begun to
be introduced, in 1992, 178
countries signed the so-called
Agenda 21, which aimed to
improve global life quality by
emphasising the position of
developing and developed
countries.

SD strategies for Country

(Egypt 2030) and organization
The Sustainable Development Goals (SDGs)

1. End poverty in all its forms everywhere.

2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture.
3. Ensure healthy lives and promote well-being for all at all ages.
4. Ensure inclusive and equitable quality education and promote life-long learning opportunities for all.
5. Achieve gender equality and empower all women and girls.
6. Ensure availability and sustainable management of water and sanitation for all.
7. Ensure access to affordable, reliable, sustainable and modern energy for all.
8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and
decent work for all.
9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.
10. Reduce inequality within and among countries.
SSCM 11
The Sustainable Development Goals (SDGs)

11. Make cities and human settlements inclusive, safe, resilient and sustainable.
12. Ensure sustainable consumption and production patterns.
13. Take urgent action to combat climate change and its impacts.
14. Conserve and sustainably use the oceans, seas and marine resources for sustainable
development.
15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage
forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss.
16. Promote peaceful and inclusive societies for sustainable development, provide access to justice
for all and build effective, and accountable and inclusive institutions at all levels.
17. Strengthen the means of implementation and revitalize the Global Partnership for Sustainable
Development.
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Egypt, Arab Rep.

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 Motivators for improving SC Sustainability
• EY teams conducted a survey about the sustainable supply chain

approaches at 525 large corporations across Argentina, Brazil, Canada,

Mexico and the United States (US).

• The various sectors included retail, consumer packaged goods, health

providers, life sciences, government, technology, energy, manufacturing,

mobility, and food and agriculture.

• The research shows that while many executives have long-term

sustainability goals for their supply chains, few have the visibility,

technology and comprehensive programs in place to measure their

progress.

• Challenges to their green initiatives include upfront costs and a lack of a

clear business case to support the expenditures.

• https://www.ey.com/en_us/supply-chain/supply-chain-sustainability-

2022?WT.mc_id=10822079&AA.tsrc=paidsearch&gad=1
 What is Supply Chain Sustainability?

• SSCM is concerned with the current concept of SCM, which includes practices such as
green sourcing, green construction, waste management, reverse logistics, product
recycling, pollution mitigation, energy usage and resource conservation, among others
to ensure an environmentally sustainable supply chain (Pietanza et al., 2018).

• Supply chain sustainability refers to companies’ efforts to consider the environmental

and human impact of their products’ journey through the supply chain, from raw
materials sourcing to production, storage, delivery and every transportation link in
between.

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What is Supply Chain Sustainability?

• The goal is to minimize environmental harm from factors like energy usage, water
consumption and waste production while having a positive impact on the people
and communities in and around their operations. These concerns are in addition
to traditional corporate supply chain concerns around revenue and profit.

• The objective of supply chain sustainability is to create, protect and grow long-
term environmental, social and economic value for all stakeholders involved in
bringing products and services.
Supply Chain Sustainability
Examples
• Some brands make clothes from recycled plastic bottles or collect used garments, repair them and
resell them as “upcycled” goods.
• Patagonia operates an award-winning green distribution center and built a “zero waste” program by
reducing the weight of packaging and using sustainable packaging materials.
• As an industry collaborative, the Sustainable Apparel Coalition’s aim is “an apparel industry that
produces no unnecessary environmental harm and has a positive impact on the people and
communities associated with its activities.”

• Examples of sustainability cut across industries, per stories from publisher SustainCase.:
• For example, one road builder that previously bought asphalt based on price alone cut shipping
distance and related carbon emissions by 40% and achieved a lower total landed cost by buying local
supplies.
• A fast food company redesigned its packaging to avoid repacking in the supply chain, eliminating
literal tons of waste.
• An electronics company requires suppliers to sign a “code of conduct compliance declaration” that
highlights integrity and governance.
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 Drivers Paybacks
Growing consumer demand for sustainable
 Environmental phenomena (Climate  products
Pollution
2001)
and services. (Mentzer et al.,
Mitigation

Change and Global Warming..etc)  Regulatory pressure to address

Product Differentiation
environmental and socialand Competitive
issues. (Sarkis et
al., 2011)
 International Regulations (WEEE) Advantage
Increased awareness of the risks associated
with unsustainable practices. (Asif et al.,
 Stakeholders Pressures  Improved
2012)Workplace Conditions

 Enhanced Brand Reputation and  Stronger Community Relationships

Customer Loyalty  Adapting to Regulation and Reducing Risk
 Globalization  Positive Impact on Financial Performance
(Shekarian et al.,2022; Seuring and Müller 2023)
Business Drivers for Supply Chain
Sustainability
Example of Operational Efficiency: Example of Sustainable Products:

• Reducing costs without • Sourcing raw materials with social

negatively impacting operations, and environmental impacts

such as shipping products via explicitly considered, such as

ocean freight rather than via air biologically based plastics that

cargo when practicable. emit relatively fewer greenhouse

gases throughout their lifecycle.
Benefits of Green Supply Chains

• Positive Impact on Financial Performance

• Sustainability of Resources

• Lowered Costs/Increased Efficiency

• Product Differentiation and Competitive Advantage

• Adapting to Regulation and Reducing Risk

• Improved Quality and Products

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Practical steps companies can take
to achieve supply chain
sustainability
Managing Risk Creating sustainable products
Practical steps companies can take to achieve supply
chain sustainability : Commitment in Vision

• L’Oreal “We are committed to building strong and lasting relationships with our customers
and our suppliers, founded on trust and mutual benefit. We do business with integrity: we
respect the laws of the countries in which we operate and adhere to good corporate
governance practices….We are mindful of our impact on the natural environment…We are
committed to the respect of human rights. We want to end the exploitation of children in
the workplace and the use of forced labour…We actively seek out and favour business
partners who share our values and our ethical commitments.”
Practical steps companies can take
to achieve supply chain
sustainability
• The objective of determining the scope of the programme is to identify which of your
suppliers you should engage with and to what extent, noting that programme
boundaries tend to change over time as companies become more sophisticated and
capable to manage supply chain sustainability more effectively.

• Examples: Ford Motor Company has made it a priority to take action on forced labour
in the production of pig iron, which is used to make steel, even though it is six or
seven tiers removed