Sustainability Helps Power Schneider Electric to Top of Gartner Rankings

June 05, 2023
By Dan Zeiger

At the start of his session at the ISM World 2023 Annual Conference in Grapevine, Texas, last month, Schneider Electric CPO Dan Bartel stated that he was eager to share some of the company’s key supply chain principles with attendees.

Then, he added, perhaps only half-jokingly: “Unless you are one of our competitors.”

The supply chain successes of Schneider Electric, the French multinational digital automation and energy management provider, have proven worth studying: For the first time, the company claimed the top spot in the Global Supply Chain Top 25 rankings by Gartner.

Schneider Electric, which ranked No. 2 last year, switched rankings with Cisco Systems, ending the San Jose, California-based technology provider’s three-year reign at the top. Nos. 3-5 remained unchanged: Colgate-Palmolive, Johnson & Johnson and PepsiCo.

That — and that this year’s ranking include only four new entrants — are indications of the supply chain stability displayed by leading organizations, which has been especially valued in the coronavirus pandemic era. The four new entrants are Tesla, Anheuser-Busch Inbev, GlaxoSmithKline and Dow.

“The leading companies on our list are notable for pursuing new avenues of growth at a time when disruptions remain a near constant threat," Mike Griswold, vice president team manager with the Gartner Supply Chain practice, said in a press release. “The best supply chain organizations are embracing the moment by both pursuing growth, while also evolving more sophisticated risk management approaches.”


Schneider Electric CPO Dan Bartel during his session at the ISM World 2023 Annual Conference last month in Grapevine, Texas.

Also new to the rankings, sort of: McDonald’s. In 2015, Gartner designated a “masters” category separate from the Top 25, and for years, those five supply chain titans — Amazon, Apple, McDonald’s, Procter & Gamble and Unilever — were unchanged. However, McDonald’s did not qualify for masters status this year; the fast-food giant is in the regular rankings at No. 20.

Gartner, the Stamford, Connecticut-based research consultancy, recently began giving more weight to environmental, social and governance (ESG) standards in compiling its rankings — which plays to what Bartel told ISM World 2023 attendees is perhaps Schneider Electric’s biggest supply chain strength.

Starting in 2022, ESG scores increased to 20 percent weighting, while return on physical assets (ROPA) figures fell to 15 percent. The other criteria for Top 25 rankings are inventory turns (5 percent), revenue growth (10 percent), and research opinions by Gartner analysts (25 percent) and community peers (25 percent). Among the third-party sources and frameworks factoring into Gartner’s ESG methodology are the United Nations Global Compact, Global Reporting Initiative and Dow Jones Sustainability Index.

“Schneider Electric’s work embodies multiple trends we see among top supply chain organizations this year, such as embracing an ecosystem approach that has helped reduce the carbon footprint of some key suppliers by 10 percent in less than two years,” Griswold said. “Sustainability continues to be front and center for the members of our list, with 19 companies once again achieving perfect ESG scores.”

In his session, Bartel stressed the importance of the social and governance components in the company’s sustainability initiatives, but some of Schneider Electric’s most ambitious goals fall under the “E” and entail dogged work with suppliers. Among its 2025 targets: a 50-percent reduction in carbon dioxide (CO2) emission from its top 1,000 suppliers, a 50-percent increase in green material products and all packaging with recycled cardboard and/or plastic.

“Sustainability is one of the things we do best at Schneider,” Bartel said. “I believe we have one of if not the world’s best supplier sustainability programs.”

He added that ESG initiatives have become personal to Schneider Electric employees. “We’re doing something that matters and makes a difference,” Bartel said. “Are we saving the world? I don’t think so. It’s going to go on. But I think we’re absolutely making a difference.”

(Top image credit: Getty Images/Senko Nelly)

About the Author

Dan Zeiger

About the Author

Dan Zeiger is Senior Copy Editor/Writer for Inside Supply Management® magazine, covering topics, trends and issues relating to supply chain management.