Sustainability will be the trigger for supply chain collaboration

Professor Jack van der Veen

Jack van der Veen, professor of Supply Chain Management at Nyenrode Business University, is convinced of it: “The government and ultimately consumers will push companies to really start working on their sustainability. Employees also increasingly believe this is important. Creating pollution at the expense of others is no longer acceptable. Sustainability does not stop at the gates of companies and will therefore be a trigger for supply chain collaboration. To be able to truly improve, companies need the chain. Going at it alone won’t work.”

The added value of supply chain collaboration is obvious to Van der Veen. “By working together, companies can operate faster, better, cheaper, more innovative and therefore more sustainable. On top of that, it’s more enjoyable. you create a transparent chain, without unnecessary intermediaries. Hiccups and bottlenecks in the supply chain become visible and can therefore be dealt with. Reliability increases, error rates decrease, and customer satisfaction rises.” The professor calls it a market failure that there is still so little collaboration in the chain despite the advantages. “The generation that is running companies these days, often sees no reason to bring about any real changes. They have already survived so many crises. It is simply in their genes to keep their cards close to their chest.”

CSRD will be a game changer

The upcoming introduction of the Corporate Sustainability Reporting Directive (CSRD) is going to be a game changer, according to Van der Veen. This new European legislation, which will take effect step by step from 2024, requires companies to report annually on the impact their operations have on people and the environment. Both in terms of what they do themselves, the indirect emissions related to this, and what happens in the chain through suppliers and customers.

“Whether people like it or not, the CSRD requirements will hopefully prompt at least part of the business community to develop a strategic sustainability plan and start managing towards it through concrete performance measurements. This will also be the first step towards collaboration with supply chain partners. You cannot achieve sustainability single-handedly; it requires the entire chain. To obtain information on sustainability performance further down the chain - and to improve it - a company depends on its chain partners.” It also makes the CSRD extremely relevant to logistics companies that are not (yet) directly subject to the new regulations. Clients will start demanding concrete figures on sustainability performance in the short term.

Improving logistics processes together

Van der Veen continues: “The CSRD thus ushers in the era of supply chain collaboration. A chain-wide sustainability agenda lays the foundation for the integral improvement of joint logistics processes. Through further digitalisation, this will give substance to mutual information needs.”

A hopeful development, but supply chain collaboration does not happen by itself, the professor points out in conclusion. “It requires a strategic vision of what you want to achieve as a company and which supply chain partners you want to do that. You will really have to involve people in this process. The key is to create the right environment for this.”