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As businesses worldwide face mounting pressure to adopt sustainable practices, the supply chain has emerged as a critical area for embedding Environmental, Social and Governance (ESG) principles. A green supply chain minimizes environmental impact while fostering social responsibility, enabling companies to reduce emissions, enhance resource efficiency and ensure ethical sourcing.
This approach mitigates risks associated with climate change and resource depletion and bolsters a business’s reputation. It attracts eco-conscious consumers and meets the growing expectations of investors and regulators.
According to a 2023 report, over 70% of supply chain professionals view sustainability as essential to their operations, underscoring its strategic importance. The World Economic Forum further indicates that effective supply chain management is critical for achieving broader ESG objectives, as it enhances brand reputation and customer loyalty. In today’s business landscape, building a green supply chain is a strategic step toward long-term growth and resilience.
Challenges in building a global green supply chain
Building a global green supply chain presents multifaceted challenges, particularly in achieving visibility and transparency across supply chain functions. According to EY, many organizations struggle with fragmented digital adoption, as 22% of supply chain leaders rely on basic tools like emails and spreadsheets, while only 42% have begun adopting cloud-based platforms.
This lack of integration hinders real-time data sharing, which is crucial for tracking environmental impact and aligning with sustainability goals. Additionally, transitioning to decarbonization and net-zero targets is complicated by economic constraints, with businesses often facing competing ethical and economic objectives.
Securing investments in green technologies can be challenging, as these initiatives require significant upfront costs that may disrupt existing value chain goals like cost reduction and efficiency. Furthermore, the lack of uniform standards across international markets exacerbates the complexity of compliance, especially for multinational corporations managing diverse sourcing strategies and varied environmental regulations.
Related: How Businesses Can Empower Consumers to Make Sustainable Choices
How to implement sustainable practices across the supply chain
A truly green supply chain relies on technology to drive sustainable practices from sourcing to delivery. Walmart exemplifies this with its advanced digital capabilities that align operational efficiency with environmental responsibility.
By employing AI-driven forecasting, Walmart minimizes overstocking, reducing energy usage and waste in its supply chain. The company’s blockchain technology tracks the origin, freshness and environmental impact of its food products, fostering transparency and sustainability across its supplier network.
Walmart has also tested electric trucks and refrigerated trailers to cut emissions, demonstrating how innovative logistics contribute to achieving its net-zero emissions goal by 2040. These efforts illustrate how technology enables businesses like Walmart to meet sustainability targets while maintaining a competitive edge.
Similarly, my company, ATRenew, a major electronics recycling and transaction platform in China, focuses on reducing its carbon footprint by using intelligent systems and digital management for streamlined recycling and green warehousing. It also fosters a susta