Sustainable Supply Chain: The Stakeholder Analysis

The growing awareness of the effects of climate change and the depletion of natural resources has driven the emergence of sustainable development as an essential trend for the 21st century. This concept is based on creating shared value-seeking benefits for companies and society.

Sustainable development encompasses a wide range of companies that develop technological solutions to mitigate or solve significant environmental problems, such as reducing greenhouse gas emissions, reducing dependence on fossil fuels, and creating sustainable jobs. Therefore, companies' performance adjustments include initiatives to promote a cleaner and more sustainable economy. These initiatives have enormous potential to provide innovative solutions while contributing to the protection of the environment and the well-being of society.

Adopting a shared responsibility approach implies considering the interests and impacts of all stakeholders involved in the process. This article will explore the importance of analyzing stakeholders and shareholders in the sustainable supply chain and how this analysis can help companies create more efficient and responsible strategies.

What is a sustainable supply chain?

A sustainable supply chain goes beyond simply supplying products and services. It aims to integrate environmentally conscious practices, social responsibility, and ethical governance at all stages of the process, from the selection and acquisition of raw materials to the distribution of the final product. This holistic approach is critical to ensuring the supply chain is economically viable, socially fair, and environmentally responsible.

Why have a sustainable supply chain?

By adopting a sustainable supply chain, companies commit to minimizing the environmental impact of their operations, using practices such as reducing plastics in packaging, using renewable energy, and managing waste responsibly. Furthermore, they also seek to promote social responsibility, ensure adequate working conditions, respect human rights, and contribute to developing the communities in which they operate.

Stakeholder analysis becomes fundamental since sustainable supply chains involve several interested parties, such as suppliers, customers, employees, NGOs, and local communities. Understanding the needs and expectations of each stakeholder is essential to ensure the effective implementation of sustainable practices and the creation of shared value. Transparency and open dialogue with everyone involved are the basis for building trusting relationships and achieving long-term sustainable results. Preventing “greenwashing” – a deceitful advertising method using misleading claims to generate a “greener” more sustainable or ecological image than existing to gain favor – makes aware companies accountable for their sustainability claims.

It is essential to highlight that adopting a sustainable supply chain benefits the environment and brings competitive advantages to companies. With growing consumer demand for sustainable products and services, those implementing responsible and transparent practices can gain market preference and strengthen their reputation.

Who is demanding sustainable supply chains?

Purchasing is no longer just a function aimed at saving costs. It has become a strategic area that generates value for companies and is fundamental to ensuring long-term competitiveness. The main parties involved in this process are identified below to understand how each contributes to the supply chain's success.

B2C Consumers: Today, they are highly informed and aware of sustainability issues. They are increasingly inclined to seek out companies with ethically sound supply chains aligning with their values. Harmful exposure on social media about topics such as child labor, poor treatment of animals, or environmental pollution can devastate a company's reputation – and once consumer trust is lost, it is challenging to regain.

B2B Customers: Due to the responsibility of companies regarding practices in their supply chains, suppliers are often required to disclose their sustainability policies and take measures as part of the pre-qualification process. This means that even small and medium-sized businesses not legally affected by reporting duties must adopt these practices to remain competitive.

Regulators: International organizations and national legislation have specified specific requirements to establish responsibility and sustainability in the global economy. A growing number of laws have asked companies to consider environmental, social, and governance issues, including monitoring and reporting on the practices adopted by their suppliers. Lack of compliance and insufficient or false reporting can lead to severe consequences, including heavy penalties and even prison sentences. It is essential to highlight that many laws, such as those to combat corruption and combat slave labor, have extraterritorial reach, which means that companies with international supply chains can be affected by legislation beyond national borders.

Investors: They increasingly know that environmental, social, and governance (ESG) factors significantly impact a company's performance and market value. Reporting on sustainability and ensuring that suppliers follow these practices and comply with regulatory demands is becoming an essential requirement for large investment firms. Sustainable investing is not just a passing trend but a lasting approach that is here to stay.

By recognizing the importance and role of each stakeholder, companies can improve their practices by promoting transparency, efficiency, and the creation of shared value.

Sustainability is no longer a “nice to have”

It became a strategy. Companies must maintain their competitiveness and license to operate in the coming years, which increasingly significantly impacts financial results. All the stakeholders mentioned here are increasing pressure on companies to assume social responsibility, and only those who can adapt will survive in the long term, maximizing the creation of shared value for their owners/shareholders and their other stakeholders and society at large, identifying, preventing and mitigating their possible adverse impacts.

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Author: Maurício Bitencourt, Student of MBA Sustainability Management Class 1 (2023-2025)