Gartner says the best supply chains have ESG criteria baked in. Businesses across EMEA are showing growing commitment to driving positive change through their supply chains.

What makes a great supply chain? According to business intelligence group and analyst Gartner, sustainability in operations and a strong commitment to environmental, social and governance (ESG) matters are prerequisites for a strong supply chain. That showed up in the 2024 edition of Gartner’s Global Supply Chain Top 25, which each year recognises the leading organisations while also illustrating the underlying trends that drove these businesses to their high-level performance. Manhattan Associates’ customer Schneider Electric retained its top position in the list in 2024, with Cisco Systems, Colgate-Palmolive, Microsoft and Johnson & Johnson completing the top five. Walmart (ninth), L’Oreal (11th), Nike (14th) and Zara owner Inditex (18th) were notable retail representatives in the list.

Simon Bailey, Vice President Analyst with the Gartner Supply Chain practice, says: “The supply chain organisations in this year’s Top 25 were notable for better protecting growth rates in a challenging operating environment, while at the same time delivering more sustainable operations. The best supply chains now have ESG criteria firmly embedded in their operations, while delivering higher than average growth rates, better returns on physical assets, and stronger margins.”

Schneider Electric

We heard about Schneider Electric’s sustainability strategy in detail at Manhattan Exchange 2023, in Cannes. On stage at that event, its Global Director for Logistics Sustainability, Marcus LeMaster, spoke of the importance of technology and data in terms of decarbonisation. “It’s not just road miles in the final delivery - we talk about driving out miles globally”, he explained. “When you talk about reducing miles, look at your entire end-to-end supply chain. How is that product moving? Look at all the pieces.”

He added: “Reducing the miles is an end-to-end process and this is where the tech and data come in. You need to have the digitisation and have the data - whether it’s in control towers or your systems - to then be able to do the analytics on it and say ‘this is where my opportunity is going to be?’”

They may not appear on Gartner’s list, but some of the retailers Green Retail World is tracking as the industry continues to work through its environmental awakening are worthy of a mention. Below are three examples of retailers making efforts to decarbonise their supply chains, and a little explanation of how they are doing it.

Chalhoub Group

Middle East-based luxury goods retail group and distributor is providing its suppliers with an array of essential sustainability tools and access to training after partnering with Schneider Electric at the end of 2023. The sustainability services agreement involves Schneider helping Chalhoub with its goal of reducing scope 3 emissions by 30% by 2032 on its way to net zero by 2040.

The collaboration primarily targets selected suppliers in the purchased goods and services category, as they account for the lion’s share of the group’s scope 3 emissions. Diagnostic mapping of the luxury organisation’s suppliers identified those with high emissions that which were yet to establish science-based carbon reduction targets – and now work is under way to help make improvements.

“When you talk about reducing miles, look at your entire end-to-end supply chain.”
Marcus LeMaster Global Director for Logistics Sustainability Schneider Electric

Pandora

Global jewellery retail group Pandora, which is headquartered in Copenhagen, Denmark, announced in January it is now only sourcing recycled gold and silver for its products. The retailer had set a five-year target in 2020 to achieve this but reached the landmark position in December 2023, well ahead of schedule. By using recycled metal rather than newly-mined material, Pandora estimates it will remove 58,000 tonnes of CO2 every year because of the reduction in energy recycling instead of mining brings.

All the retailer’s suppliers have switched their operations to only source materials that are certified recycled in accordance with the Responsible Jewellery Council Chain of Custody. The transition work and supplier education and engagement projects involved circa 100 Pandora employees, and despite goods made with directly mined materials still in its inventory at the start of 2024, the expectation is Pandora will craft all new jewellery with 100% recycled silver and gold from the second half of 2024.

“The best supply chains now have ESG criteria Firmly embedded in their operations”
Simon Bailey, Vice President Analyst Gartner Supply Chain

Boots and No7

In May, Boots and its No7 beauty brand became the first health and beauty business to join software provider Manufacture 2030’s (M2030) supply chain decarbonisation platform. Several UK grocers, including Manhattan customers Co-op and Asda, were already strategic partners of M2030, which helps companies manage, measure, and reduce their greenhouse gas emissions. Users can gain access to a range of best practice tools, expert knowledge, and funding opportunities to drive decarbonisation throughout their supply chain and engage suppliers in the process. Described by Martin Chilcott, CEO of Manufacture 2030, as “a collaborative platform” involving thousands of manufacturing businesses “committed to accelerating decarbonisation worldwide”, M2030 helps pinpoint areas of improvement and instigate action. The platform has ‘Tech Pioneer’ status from The World Economic Forum, and in 2023 raised £5 million in Series A investment round. It’s set to be a key player in retailers’ and brands’ supply chain decarbonisation journeys. As the planet heats up, and human-influenced climate change continues, even more collaboration, clever thinking, and transformation of supply chains will be required of retailers and brands to limit the damage on nature and the environment.

Ben Sillitoe, Founder & Editor Green Retail World

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