With major climate change threats sparking overarching government interventions ahead, the reality is that sustainability has taken-on newfound importance

The world has faced a relentless barrage of crises in recent years, from the global pandemic to elevated trade tensions, deceleration of economic growth, and ongoing conflicts in the Ukraine and Middle East.

This has reinforced the importance and urgency of building resilience in global supply chains, prompting a justifiable reassessment of strategies and investments. However, what is most striking, is that investment into resilience could sometimes be prioritized above all else, including sustainability.

Yoon Young Kim, Cluster President (Singapore & Brunei), Schneider Electric

This approach risks overlooking the interconnectedness between sustainability and resilience. Neglecting this link in supply chain strategies could lead to shortsighted decisions that undermine long-term environmental and organizational progress. 

So how do we bring balance to the sustainability-and-resilience equation?

  1. Prioritize sustainability to build resilience

    Traditionally, building resilient supply chains has been associated with diversifying a firm’s supply chain; ensuring good visibility and agility to adapt sourcing, manufacturing and distribution activities swiftly. However, as sustainability and the decarbonization of business operations take center stage, realizing and acting on the synergy between sustainability and supply chain resilience will have to become the new norm.

    Integrating sustainability principles, such as resource efficiency, renewable energy adoption and responsible sourcing, directly bolsters supply chain resilience, mitigates risks, and future-proofs operations against environmental and economic uncertainties. In other words, developing sustainable supply chains inherently contributes to building resilience, as these objectives converge.

    Also, the strategic imperative to decarbonize supply chains is gaining traction, particularly in Asia. With mandatory climate impact disclosures looming for large corporations, early adoption of green practices in supply chains is advantageous. Small- and medium-sized enterprises — integral to the global supply chain — must also prioritize sustainability for their long-term success.

  2. Harness digital as the entry point

    In recent decades, digital technologies have enabled firms to balance long-term environmental goals with short-term business priorities. For instance, integrating IoT devices securely into legacy operating procedures enables real-time monitoring and data analytics. Enhanced visibility empowers businesses to identify potential disruptions proactively, optimize resource usage and bolster both operational sustainability and supply chain resilience.

    Additionally, digitalization also improves visibility and control of businesses’ entire value chain. It empowers firms to make emissions reduction decisions based on real-time data and implement solutions to reduce emissions through better management of energy data.

    Furthermore, with data and data management becoming increasingly vital as nations roll out their climate disclosure regime, digitalization will become increasingly key in green action and long-term operational success.

  3. Empowerment through collaboration

    The path forward is clear: a fundamental reassessment of ethos, and a commitment to strategize, digitalize, and decarbonize — are foundational to developing supply chain resilience. This commitment must resonate across organizations, business units, teams, and individuals to yield meaningful impact.

    Given the multifaceted nature of this endeavor, upskilling the workforce and fostering collaboration with diverse stakeholders emerge as crucial facets. Private sectors can establish collaborations with governments to find synergies and speed up zero carbon outcomes.

    By partnering with the public sector, private actors gain access to funding, resources, specialized knowledge, innovative solutions, and best practices not readily available otherwise. Collaboration with technology providers, industry peers, public officials, and stakeholders fosters a culture of continuous improvement, benefiting all involved.

Finally, organizations should seek to balance their sustainability and resilience approach with the adoption of innovative technologies to take actionable steps now rather than later.