Sustainable Supply Chains and Environmental Risk Management

The Importance of Sustainability in Modern Supply Chains

Sustainability in supply chains benefits not only businesses but also contributes positively to society and the environment. Adopting sustainable strategies helps control production costs, save operational expenses, and build brand value.

According to a Nielsen report, more than 80% of global consumers are willing to pay more for environmentally friendly products. In Vietnam, consumers are increasingly prioritizing “green” and “sustainable” brands, reflecting a shift in consumption preferences.

Moreover, building sustainable supply chains helps businesses mitigate financial risks, especially as environmental regulations become stricter. The Global Sustainable Development Report 2024 states that companies violating environmental standards risk facing penalties twice as severe as those five years ago. This makes sustainable supply chains not merely a choice but an imperative requirement.

Sustainable Strategies in Supply Chains

To establish sustainable supply chains, businesses need to implement various strategies, ranging from reducing emissions and using recycled materials to optimizing operational processes.

Reducing Emissions

One key strategy is to apply modern technology to reduce emissions during production and transportation. For example, Nestlé Vietnam has invested in renewable energy systems at its factories, cutting CO₂ emissions by 60% within three years. Additionally, solutions such as optimizing transportation routes, using electric trucks, or clean fuels are being adopted by many companies to minimize environmental impacts.

Using Recycled Materials

The use of recycled materials helps reduce waste, conserve resources, and meet the growing demand for sustainable consumption. Companies like Coca-Cola and Tetra Pak have pledged to use 100% recyclable packaging by 2030. In Vietnam, Vinamilk has transitioned to using packaging made from recycled paper, significantly reducing plastic waste.

Collaboration in the Supply Chain

Collaboration among stakeholders within the supply chain is essential for achieving sustainability goals. For example, major retailers like Walmart and Big C require suppliers to strictly adhere to sustainability standards in production and packaging. This not only creates pressure but also fosters positive change throughout the entire supply chain.

Environmental Risk Management in the Supply Chain

Climate change and other environmental risks are significantly threatening the stability of global supply chains. According to the World Resources Institute (WRI), approximately 45% of businesses worldwide experienced supply chain disruptions caused by natural disasters in the past five years.

Forecasting and Planning

Businesses need to develop scenarios to address emergency situations such as storms, droughts, or environmental incidents. Companies like Apple and Microsoft have implemented risk management systems powered by big data to evaluate the impact of climate change on their suppliers. In Vietnam, agricultural firms like Hoang Anh Gia Lai are investing in weather forecasting systems and adjusting transportation schedules to minimize damage caused by natural disasters.

Diversifying Suppliers

Over-reliance on a single supplier poses a significant risk when environmental disruptions occur. Diversifying suppliers enables businesses to remain flexible in case one supply chain is interrupted. Samsung, with its extensive supply chain network in Vietnam, has adopted this strategy by expanding its supplier network across different regions to ensure operations are not affected by local natural disasters.

Investing in Technology and Green Processes

Technology plays a vital role in managing environmental risks. The Internet of Things (IoT) and Artificial Intelligence (AI) systems can closely monitor supply chains, quickly detect issues, and respond promptly. Logistics company DHL has implemented IoT sensors on trucks to monitor pollution levels and optimize delivery routes, reducing CO₂ emissions by 20%.

Leading Companies in Building Sustainable Supply Chains

Several major corporations have pioneered the adoption of sustainable strategies and effective environmental risk management:

• Unilever: Committed to halving greenhouse gas emissions across its global supply chain by 2030 through production optimization and renewable energy utilization. In Vietnam, the company has transitioned to biomass energy sources at its Bac Ninh plant, significantly reducing greenhouse gas emissions.
• IKEA: Known for its commitment to using 100% renewable or recycled materials in its products. The company has also deployed optimized logistics systems, incorporating electric trucks in key markets.
• Nestlé Vietnam: Highly regarded for its "Zero Waste to Landfill" model, ensuring all production waste is either recycled or reused, avoiding landfill disposal.

These companies not only generate economic value but also contribute significantly to environmental protection, setting a benchmark for modern industries.

Sustainable Development Directions for the Future

In the context of climate change and growing consumer demands for environmental responsibility, building sustainable supply chains is an indispensable task for businesses. Vietnam holds great potential for development due to its advantageous geographic location, young workforce, and access to modern technology.

To achieve sustainable growth, Vietnamese businesses should:

1. Invest in advanced technologies to minimize environmental impact.
2. Foster strong partnerships with both domestic and international stakeholders.
3. Focus on training a highly skilled workforce in supply chain management and sustainability.

With the right strategies, Vietnamese companies can enhance their competitiveness while contributing significantly to global sustainability goals, building an economy that is environmentally and socially friendly.

By Hoang Le