Circular Economy - Greening the Supply Chain

What is Sustainability - the ability to continue at a particular level over a period of time. Let us understand why sustainability has become such an important requirement in today’s world. In our quest to improve our standard of living and lead a comfortable life, we are continuously engaged in producing new products and technologies. Business organizations are constantly engaged in increasing their profitability and market share. This has led to a growing concern regarding the impact of our businesses on the environment. Some of these concerns are the depletion of natural resources like oil, natural gas, and coal are the key natural resources, the waste generated from production and service systems.

It is a general misbelief that making changes to adopt sustainability practices will reduce the profitability of an organization. General research shows that most organizations are getting monetary and non-monetary benefits from sustainability initiatives. So, let’s look at some of the benefits of moving organizations to sustainable practices.

1. The first benefit that we look at is enhanced brand reputation. Organizations that are increasingly adopting sustainability practices are experiencing an enhanced brand reputation and an improvement in their ESG, which is their economic, social, and governance rating. Sustainability practices are helping organizations gain better operational efficiency.

2. The second one is the reduced cost of capital. So, adopting sustainability practices helps lower the cost of capital. The cost of capital is basically the cost that a business incurs to get money for its day-to-day activities or operations.

3. The third one is improved efficiency by reducing its carbon emissions.

4. The fourth one is reduced costs by replacing plastic packaging material with more sustainable options, like fibre-based materials.

5. The next advantage is increased sales. So as awareness of the importance of environmental sustainability increases, consumers are changing their purchase preferences to buy products based on their social, economic, and environmental impact.

6. The next one is tax incentives. Organizations can also benefit from tax incentives from governments for their sustainability projects.

7. The next one is to increase employee motivation levels by helping them contribute to a better environment.

Now, there is an additional video on the fundamentals of Supply Chain Management - The chain of the organization involved right from the raw material until the finished product is delivered to the final customer is known as Supply Chain. The process includes Procurement of input material and services, production of goods and services, distribution to the end customer. One of the examples is the Supply chain network of Mumbai Dabbawallas (tiffin service). We will look into this example as to why these dabbawallas are doing so well without any failure.