What Is a Sustainable Supply Chain? And Why Is It So Important?

In today's interconnected and globalized world, the concept of a sustainable supply chain has moved from a niche concern to a core strategic priority for companies worldwide.

Companies have an unprecedented opportunity—and responsibility—to adopt sustainable practices that benefit not just the bottom line but also the environment and society at large. A sustainable supply chain is the blueprint for achieving this, enabling businesses to operate responsibly and reduce their ecological footprint while enhancing operational resilience.

But what exactly does a sustainable supply chain entail, and how can advanced supply chain business network solutions like Infor Nexus play a crucial role in making it a reality?

Understanding a Sustainable Supply Chain

A sustainable supply chain goes beyond traditional notions of efficiency and profitability. It encompasses practices and processes designed to minimize environmental impact, reduce waste, and create positive social impacts across every touchpoint in the supply chain. A sustainable supply chain involves sourcing responsibly, optimizing production, reducing emissions, ensuring ethical labor practices, and maintaining transparency across the entire network. The objective is to balance economic growth with environmental stewardship and social well-being, transforming supply chain operations to promote long-term sustainability for both businesses and the communities they touch.

The Importance of Sustainability in the Modern Supply Chain

Environmental Impact: Supply chains have long been contributors to environmental degradation, accounting for significant greenhouse gas emissions, resource depletion, and waste production. The impact of global warming, deforestation, water scarcity, and biodiversity loss increasingly affects business operations, driving an urgent need for companies to shift toward eco-friendly practices that limit their environmental footprint.

Consumer Demand for Transparency: Today’s consumers are more informed and increasingly hold companies accountable for their environmental and social practices. A 2024  survey from PWC found that more than 80% of consumers say they are willing to pay a premium for sustainability produced or sourced goods. Companies with sustainable practices build stronger brand loyalty, trust, and consumer advocacy.

Regulatory Pressure: Governments worldwide are implementing stricter environmental regulations, imposing penalties on companies that fail to meet sustainability standards. Compliance with these regulations is no longer optional but an essential requirement for doing business. Sustainable supply chain practices help companies meet regulatory requirements and stay ahead of upcoming mandates.  The EU's Corporate Sustainability Reporting Directive (CSRD) is a prime example, requiring companies to report on environmental, social, and governance impacts. 

Operational Resilience: Sustainable supply chains are also more resilient. By relying on responsible sourcing, reducing dependence on single suppliers, and adopting sustainable materials, businesses create a more stable and flexible network. This resilience mitigates risks associated with supply chain disruptions, where companies with greater diversity within their supply chains fare better than those without.

Financial Performance: There’s a strong correlation between sustainability and profitability. Sustainable practices can reduce costs over time through efficiency gains, waste reduction, and energy conservation. Companies that prioritize sustainability often see better financial performance and increased shareholder value due to their ability to manage resources effectively and create long-term value.

The Role of Infor Nexus in Building a Sustainable Supply Chain

Infor Nexus provides powerful cloud-based solutions that support businesses in creating and maintaining sustainable supply chains, which helps enhance transparency, increase efficiencies and reduce waste. 

Enhanced Transparency Through Real-Time Visibility: Infor Nexus provides real-time visibility across the entire supply chain, enabling companies to track and monitor the origins, movement, and status of products and materials from source to destination. This support is intended to ensure smoother handoffs, reduce idle times, and reduce expedites. With clear insights into where and how goods are produced and transported, businesses can make informed decisions that foster ethical practices and may lower their environmental impact.

Optimized Logistics to Reduce Emissions: One of the core elements of a sustainable supply chain is minimizing emissions generated from transportation. Infor Nexus enables optimized route planning to help minimize unnecessary travel and idle time, while also improving container utilization to reduce the number of containers required for shipments. Furthermore, the platform calculates transport carbon emissions, providing insights that can help companies select more eco-friendly transportation options

Supplier Collaboration and Responsible Sourcing: Infor Nexus promotes collaboration with suppliers and partners, enabling businesses to assess and monitor supplier practices, from labor conditions to environmental compliance. This feature is essential for companies committed to responsible sourcing, as it allows them to work directly with suppliers to improve standards and ensure responsible practices. By identifying suppliers that meet high ethical and environmental standards, companies can build a network of responsible partners that strengthen the overall sustainability of the supply chain.

Sustainable Supply Chain Finance for ESG Alignment: Infor Nexus empowers businesses to drive supplier performance in ESG initiatives by managing sustainable supply chain finance programs seamlessly with suppliers and banks through our platform with organizations such as Puma rewarding suppliers who meet environmental and social standards through preferential financing rates based on their ESG performance; subsequently improving the resiliency of the overall supply chain and encouraging responsible practices.

Inventory and Waste Reduction: Inefficient inventory management often results in overproduction, excessive storage, and waste. Infor Nexus provides tools that can help companies reduce excess inventory and waste through better visibility into inventory, reducing excess stock and expedites. By producing only what is needed, and by having detailed visibility into stock on hand and production throughout their supply chain, companies can minimize resource use and avoid the environmental impact of disposing of unsold goods. Inventory visibility is a key element of a sustainable supply chain, and Infor Nexus offers intelligent solutions to make it happen.

A Path Forward: Building a Better Tomorrow

Sustainability in supply chains is no longer a future aspiration—it is a present necessity. Adopting sustainable practices is the only viable path forward for businesses that seek to thrive in a socially conscious, resource-constrained world.  Infor Nexus offers a comprehensive platform that equips businesses with the tools needed to drive sustainable change. By adopting Infor Nexus, companies may be able to streamline their operations, reduce their environmental footprint, and promote ethical practices across their supply networks.

About Infor Nexus

Infor Nexus™ is the leading global supply chain platform. Infor Nexus connects a network of over 90,000 brands, retailers, manufacturers, suppliers, logistics providers and banks on single-instance network platform to seamlessly orchestrate global supply chain processes from source through to delivery and payment. Companies streamline their operations to eliminate inefficiencies and waste while gaining data-driven insights and optimizing the flow of capital for improved agility, resilience, and sustainability. Learn more here.