Dragging Sustainability through the value chain
For the last few weeks I’ve been helping small and medium sized businesses ‘build back better’ from Covid-19 through the Small Business Leadership Programme. The one thing that has really jumped out at me is that many of these businesses are being impacted not by direct constrictions on their business operations, but by the rippling effects of problems elsewhere in the value chain. If you, say, sell cakes to coffee shops and they’ve all suddenly been forced to close, then it’s a big pivot to find new markets. When the first lockdown happened, producers of flour couldn’t pivot from commercial supplies to meet the sudden demand from home bakers, because they couldn’t source enough small flour bags. Or if you are a bike shop, it’s no consolation that you’re allowed to open if you can’t get hold of bikes to sell because of the sudden upswing in demand that manufacturers struggle to meet.
It has really driven home the message that our global economy has evolved over centuries to meet our needs in a particular way and, for all the talk of business agility, supply chains cannot turn on a sixpence when a black swan event happens.
When people complain that Sustainability isn’t happening instantly, or when sceptics claim that, say, renewable energy can never meet demand, I always reply that Sustainable supply chains take either time or significant intervention to mature. We saw this when the UK’s initially generous (probably too generous) feed-in tariffs created a massive gold rush for installing solar panels – supply ramped up to meet the demand, economies of scale kicked in and prices plummeted. The UK’s renewable electricity target for 2020 was 20%, a figure many ‘experts’ said was impossible, but last year it hit 37%…
Fundamentally, it is demand for Sustainable products and services which will accelerate the maturity of their supply chains, but some crafty interventions to boost demand or unpick pinch points can make all the difference.