DO COMPANIES' ENVIRONMENTAL COMMITMENTS DIFFER ACCORDING TO THEIR SUPPLY CHAIN POSITION?

Abstract

As concerns around climate change increase, companies have been more eager to adopt environmental sustainability goals. The focus of this research is to provide insights into how a company’s position in the overall supply chain impacts their decisions to set environmental sustainability goals and initiatives. In this report, we take both a quantitative and qualitative approach to highlight the sources of pressure that influence companies’ setting of net zero goals and how they differ depending on the company and industry type. The quantitative analyses applied use data from the 2023 Survey on Supply Chain Sustainability—an annual questionnaire commissioned by the MIT Center for Transportation and Logistics and the Council of Supply Chain Management Professionals. The qualitative analysis gathered key insights from supply chain executives through interviews. Our findings confirm that, while investors continue to be one of the key drivers for companies to address sustainability as part of the corporate strategy through net zero targets, there are other sources of pressure at play. Our results also show that companies present different behaviors regarding goal setting based on their position within the overall supply chain, with downstream players having the greatest levels of commitment via their net zero goals. However, we learned that when it came to near-term initiatives to reduce Scope 3 emissions in line with the net zero goals, downstream was no different than the upstream and midstream positions— they all show most companies are unprepared to meet their carbon neutrality targets.