March 24, 2015
Socially Responsible Supply Chains Create Triple Advantage: Increased Revenue, Reduced Cost and Greater Brand Value, Finds Accenture and World Economic Forum
Geneva, Switzerland; March 24, 2015 – A new report from the World Economic Forum, written in collaboration with Accenture, identifies 31 proven practices to help companies achieve a “triple supply chain advantage” of increased revenue, a reduction in supply chain cost and added brand value. The practices also help companies shrink their carbon footprint and contribute to local development, including the health, welfare and working conditions of the communities in which they operate.
The report, Beyond Supply Chains – Empowering Value Chains, reveals that companies included in the analysis have improved their competiveness through increases in revenue (five to 20 percent), a reduction in supply chain costs (nine to 16 percent) and a boost in brand value (15 to 30 percent). Their operational risks were also reduced. Additionally, the practices, which span product design, sourcing, production and distribution throughout the product lifecycle, can help companies shrink their carbon footprints by 13 to 22 percent.
The report outlines 31 practices that can help companies realize the “triple supply chain advantages” that were identified through interviews with 25 corporations, including Nestlé, SAB Miller and UPS -- non-government organizations and other sustainability experts.
“We are committed to accelerating growth and social development in our value chain. We have hundreds of thousands of customers and suppliers that are small-scale businesses at the heart of their communities. But they often face barriers to survival and growth, like a lack of access to financing and business advice,” said Anna Swaithes, head of Water and Food Security Policy at SABMiller. “Supporting them to prosper is a key part of our business strategy.”
“Sustainability must become a higher priority in supply chain management, given the scarcity of natural resources, rising commodity prices and greater consumer expectations for responsible sourcing and production. Those who act now and capture the market opportunity of more sustainable supply chains can differentiate themselves and generate higher margins,” said Mark Pearson, senior managing director, Accenture Strategy. “This is not about trade-offs; it is about behaving in a socially responsible way that can also deliver a competitive edge.”
“Part of the difficulty to date has been the decision-making process itself as it relates to sustainability,” said Wolfgang Lehmacher, head of Supply Chain and Transport, Mobility Industries, World Economic Forum. “Our hope is that this report will empower companies to act now and place an emphasis on the maintenance and creation of responsible supply chains.”
In addition to outlining practices that others have successfully used, the report offers guidelines executives can apply to evaluate the value-creation potential of their organizations’ supply chain practices and prioritize sustainability investments. It also provides guidance for businesses to commit to engaging in practices of ethical commerce.
Accenture is a global management consulting, technology services and outsourcing company, with more than 319,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$30.0 billion for the fiscal year ended Aug. 31, 2014. Its home page is www.accenture.com.
Accenture Strategy operates at the intersection of business and technology. We bring together our capabilities in business, technology , operations and function strategy to help our clients envision and execute industry-specific strategies that support enterprise wide transformation. Our focus on issues related to digital disruption, competitiveness, global operating models, talent and leadership help drive both efficiencies and growth. For more information, follow @AccentureStrat or visit www.accenture.com/strategy
About World Economic Forum
The World economic Forum is an international institution committed to improving the state of the world through public-private cooperation in the spirit of global citizenship. It engages with business, political, academic and other leaders of society to shape global, regional and industry agendas. Incorporated as a not-for-profit foundation in 1971 and headquartered in Geneva, Switzerland, the Forum is independent, impartial and not tied to any interests. It cooperates closely with all leading organizations (www.weforum.org).