ISM study examines the state of sustainability programs and goals within supply management
TEMPE, Ariz. (August 3, 2021) – Institute for Supply Management® (ISM®) released research around the state of sustainability programming, goals and progress for supply chains. Insights reflect input gathered by ISM® from more than 550 respondents between February 12 and June 4, 2021.
The survey highlights that sustainability in supply management across many organizations is still in its infancy. For example, 56% report only using Microsoft Excel to implement and manage sustainability strategy, and 62% only use Excel as a tool to measure the effectiveness of sustainability initiatives, rather than other, more advanced tools or technology.
Most sustainability programs are driven by the ultimate parent organization (86%), but a majority (54%) of sustainability work is coordinated at the level of the individual company and/or their subsidiaries. Responsibility for sustainability strategy rises to the top of organizations, with 35% reporting the Board of Directors as the highest-ranking actively participating stakeholder of their company's sustainability goals. Chief Executive Officers followed at 28% and other C-level executives at 15% as active stakeholders.
Sustainability thought leadership within organizations is led by corporate responsibility roles, reported at 41%, closely followed by C-level executives at 40%, and then supply management at 30%. However, execution of sustainability initiatives was said to be led by supply management (44%), followed by corporate responsibility (32%) and then C-level executives (28%).
“The research shows that strategy comes from the top down, but the execution primarily rests on the shoulders of supply management professionals,” said Thomas W. Derry, chief executive officer of ISM. “In addition, the response from practitioners indicates that most supply management professionals are using basic tools to manage the strategy and effectiveness of sustainability programs for their organization. There is room for expansion and sophistication in this realm.”
Across ISM®’s 11 Principles of Sustainability and Social Responsibility within the environmental, social and governance (ESG) framework, respondents identified Ethics and Business Conduct (83%), Health and Safety (76%), Diversity and Inclusion (67%), Financial Integrity (65%), Environment (64%) and Supply Chain Sustainability (63%) as the six most important principles to their company. When asked to then rank their selections in order of importance, rankings were consistent with mentions, with a couple of variations. Ethics & Business Conduct and Health & Safety were again first and second, but Financial Integrity was promoted to a distant third and Diversity & Inclusion dropped to seventh place. Environment and Human Rights tied for fourth, but Supply Chain Sustainability dropped in importance.
When asked about sustainability goals of their suppliers, 25% of respondents said that their company requires critical Tier-1 suppliers to establish long-term and short-term sustainability goals. Thirty-six percent are considering requiring goals of their critical suppliers. As for sustainability programs, 27% say there are no plans to require their critical Tier-1 suppliers to establish a program. Thirty-four percent, however, are either actively developing program requirements (12%) or they require their Tier-1 suppliers to have a sustainability program (22%). For lower-tier suppliers, a majority (61%) say that their company includes them (18%), are rolling out requirements (4%), are actively developing their strategy to do so (10%), or are considering including lower-tier suppliers in their sustainability strategy (29%).
Survey respondents were fairly split between the manufacturing (53%) and services (47%) sectors. A slight majority (52%) hold a manager or individual contributor job level, and 47% reported a job title of director and above. In terms of company size, 62% of respondents come from a company with an annual gross revenue of $500M and above.
For more information, including a free downloadable white paper on this sustainability research, please visit ismworld.org/sustainability.