In a world where everything is intimately connected, it’s important to understand the production flow of goods or services – the supply chain ecosystem in other words. But have you ever considered the environmental impact of global supply chains?
Although supply chains might be brandished as the ‘weakest link’ for some organizations, with estimates pointing to them being 11.4 times higher than operational emissions, opportunity is certainly emerging on the horizon. We interviewed Gwyneth Fries, Expert Senior Manager at Bain & Company, who reveals how sustainability is having a rippling effect on the supply chain industry and the talent within this space.
Q: Please could you tell us a little bit about yourself, your role, and day-to-day.
I am an Expert Senior Manager at Bain & Company. My role is to provide outside expertise and be an internal expert for Bain & Company on corporate sustainability. I work on a number of projects helping organizations to decarbonize, kickstart strategies, launch new products, and create value to ultimately build a greener business.
I have been working in sustainability and sustainable development for more than 10 years. I started my career at the World Bank, advising governments in Latin America on supply chain competitiveness for agricultural products. From here I witnessed a lot of waste, particularly food waste primarily from poor logistics and infrastructure, which sparked my interest in sustainability. I then moved to Singapore in 2013, working in corporate sustainability strategy and consulting advisory at a non-profit organization, Forum for the Future. Prior to joining Bain & Company, I was also managing sustainability globally for a warehousing and logistics company called Agility for 3 years, which involved everything from running the human rights program to engaging with customers on how to reduce the emissions footprint of their shipments.
There is a huge demand for professionals with an ESG and sustainability background as individual organizations look to build out their sustainability teams. Bain & Company has internal ESG expertise by hiring people like me to match their world-class consulting and build a stronger, well-rounded team.
Q: As a sustainable supply chain and logistics expert, how have you seen the industry adapt and improve to become more environmentally conscious?
When we analyze supply chain sustainability, the primary focus is reducing emissions and decarbonization - that’s where the real crisis is. According to our research in the Southeast Asia’s Green Economy 2021 Report: Opportunities on the Road to Net Zero, the region faces a ~3-4Gt gap to 1.5°C aligned emissions levels in 2030 based on latest NDCs. The good thing about logistics is that more efficient logistics means less fuel, so there is a lot of opportunities for efficiency improvements that save on cost and carbon.
From the perspective of private companies, the focus has shifted from just efficiency to low-carbon solutions. Previously, only the biggest logistics companies would think about this issue and prioritize efficiency – businesses were not concerned with alternative fuels, electrification, or buying offsets. Maersk has been leading the charge, encouraging the shipping industry to adopt carbon targets and investment in alternative fuels. Recently, we’ve seen a lot of companies adopting an internal price on carbon, exploring shipments, using alternative fuels, working across the industry with suppliers, and couriers working with shippers and their customers to trial ‘green lanes’.
In order to build change at the industry level, we need collaboration. There are some interesting collaborations around sustainable aviation fuels, and in order to do these collaborations, you need an entirely different type of skillset. It’s not that this wasn’t tried before, but it has been long and slow – without clear international momentum and accepting that we have a climate crisis, there hasn’t been any urgency to do anything. Now that there’s an urgency, competitors are working together, and shippers are working alongside couriers. Many are thinking about moving beyond the core business, and to do this, skills and expertise will be required to determine what’s the right type of alternative fuels, electric or hybrid solution, or to invest not only in your own supply chain but in a new innovation (hybrid trucks or new companies).
In a nutshell, 5 years ago sustainability was about cost-efficiency and reducing fuel usage in supply chains. Today, it’s still about just that, but companies are looking at alternative fuels within the supply chain and beyond, acquiring start-ups, and working collaboratively to accelerate the transition to low carbon fuels.
Q: What specific skillsets are businesses looking for?
There are a few different types of skillsets, which is where businesses might need to think more carefully. Many businesses hire one sustainability or ESG professional, but this person can’t do everything.
Firstly, experts on carbon accounting and reporting are a necessity in the market. Companies have now recognized that they must do this because there is no business or future if you don’t manage sustainability perceptibly going forward. But the individual that is calculating your carbon footprint isn’t the one who knows the new type of alternative fuel that will work best for your business. Engineers with technical expertise in low carbon fuels, solar energy, or building efficiency are also important.
Additionally, collaborative skillsets are imperative. The only way to make progress is together, across multi-disciplines. We all need the industry to shift into a different way of thinking, and through this collaboration, we can build transparency and trust. This is a completely different kind of individual from the one that does your carbon accounting and the one that advises you on which innovations to pursue for R&D. You need people that can think strategically about sustainability and understand the context overall.
Q: Every business needs to be looking at securing professionals with deep sustainability expertise. Are there enough experts to go around?
I don’t think there is yet. The issue is typically common in different waves of business innovation. There weren’t graduate programs in climate change and sustainability until recently, so the professionals with sustainable fluency tend to be younger. These individuals haven’t gained the deep industry experience and credibility yet, and have not reached senior leadership roles where the real change happens. My guess is that sustainability in business is following a similar trajectory as digital did before it. Whatever the age, we need people with a vision of a sustainable, low-carbon future for the company to be in the boardroom.
Q: What is one small thing you’d recommend or a piece of guidance to businesses, perhaps who have started their journey on the supply chain, and they need to get going?
My number one tip is that sustainability needs to come as a mandate from the C-suite level. CO2 KPI targets are just as important as revenue KPIs. The mistake that several companies make is to hire a young smart professional, for example, to solve these issues. However, where they fall short is not giving that individual the authority they need or failing to involve them in business decisions. I have known many sustainability managers, and it’s common to see those individuals feeling isolated, overwhelmed, and unsupported; they often suffer from quick burnout.
Companies have a duty to their shareholders. Today, sustainability is part of that duty to shareholders. It needs to be strategic – it’s not enough to have a separate sustainability and business strategy, the two need to be fully integrated. This will create the right landscape in which to hire the right people and understand what the right skills are. If you don’t work hard to hire the right people and fail to understand the magnitude of the transformation needed, it simply won’t work out.
After hiring a professional, if a business does not support their purpose, then they will not stick around.
If you’re interested in having a confidential discussion with Gwyneth Fries, or the team at Bain & Company, please feel free to reach out via: Bain & Company Global Sustainability Innovation Center gsic@bain.com.
Looking to learn more about the sustainability metrics of supply chains? Download our comprehensive report, The Case for Sustainability Practice, for a deep dive into sustainable practices as well as the unique perspectives from sector