Companies largely maintained their focus on supply-chain sustainability goals in 2020 despite the Covid-19 pandemic, and social issues such as worker welfare and supplier diversity gained more attention, according to new research.
Some 82% of the executives surveyed said the pandemic, which triggered lockdowns and a cascading series of shortages in consumer products around the world, didn’t affect or even increased their commitments to supply-chain sustainability during 2020. The study from the Massachusetts Institute of Technology’s Center for Transportation and Logistics and the Council of Supply Chain Management Professionals was published Wednesday.
About 9% of the 2,400 respondents, most of them from North American and European companies, said their firms’ commitments to supply-chain sustainability goals declined in 2020 from 2019.
The study defines supply-chain sustainability as “the management of environmental and social impacts within and across networks consisting of suppliers, manufacturers, distributors, and customers in line with the [United Nations’] Sustainable Development Goals.”
Beyond the broad commitments, companies signaled a shift toward focusing more on social goals such as employee safety and attention to equity and inclusion as they sought to broaden their base of suppliers, according to the survey. The number of respondents who said employee welfare and safety was a priority for their companies rose 10% from 2019, while the number who said that was the case for supplier diversity, equity and inclusion increased 5%.
The results illustrate how the turmoil in corporate businesses strategies that began with the pandemic early in the year grew amid events such as the murder of George Floyd during an arrest in May and the racial protests that spread across the U.S. and elsewhere.
The report’s authors said issues such as the role of front-line workers during the pandemic, the departure of women from the workplace in disproportionate numbers and the plight of workers stranded at sea due to the pandemic heightened the focus on certain goals.
“It was surprising to see the focus on social issues,” said David Correll, a research scientist at the MIT Center for Transportation and Logistics. “The notion of social issues as part of sustainability goals is something we didn’t expect to see generally accepted, but in fact there was an increase in interest in the respondents.”
Attention dropped for issues including climate-change mitigation, down 3% from 2019, and supply-chain “circularity”—which includes the use of recyclable materials—down 5% from 2019.
Mr. Correll said focusing on those issues could have dropped much further as companies retooled supply chains and many scrambled simply to remain in business and ride out the impact of lockdowns.
“We would have expected that respondents would have framed Covid-19 and the pandemic as something that happened to them and that they therefore need a pass from their sustainability goals,” he said. “As it turned out, that isn’t how they framed it. They say it as something that happened to the entire world and that we are all going to do our best to get through it.”
Many of the companies that maintained their sustainability focus, Mr. Correll said, “saw an opportunity to make change while change is possible.”
The focus on sustainability wasn’t spread around equally. Large companies—those with more than 1,000 employees—were more likely to keep goals in place, the report said. Meanwhile, many small and midsize companies indicated “they were not engaged before the pandemic and even less so during the crisis likely due to strained financial resources.”
Write to Paul Page at [email protected]
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