Are your suppliers green or do they do greenwashing?

In recent months, the vital race to achieve net zero emissions has accelerated considerably. In the past year alone, net zero commitments from governments and private industries have increased. double, with large companies setting the highest standards.

As companies shape their sustainability policies or corporate social responsibility (CSR) initiatives, it is crucial that they ensure that supply chains are aligned with their goals. The reality is that corporate or industrial operations are now responsible for their entire supply chain, so business leaders need clear oversight to hold partners accountable for greenwashing. An example of this includes suppliers who claim to be green by using renewable energy but are not working to offset their company’s carbon footprint.

With accusations of “greenwashing” against companies intensify, organizations need to monitor this to ensure that they are creating real value with their sustainability policies and progressing towards their goals. Yet managing global and local supply chain operations can be a complex and time-consuming task. Indeed, managing supply chain disruptions in 2020, such as coronavirus disease (COVID-19) and geopolitical tensions, is costing US and European businesses. up to $ 4 trillion. Despite these challenges, the climate crisis is more urgent than ever and companies simply cannot afford to be held back by suppliers in their green transition.

So, in the future, what are the signs that supply chain managers can look out for to prevent greenwashing in their partner network? And, are green technologies, especially those powered by artificial intelligence (AI), the answer to removing greenwashing from supply chains and achieving long-term net zero success?

How to recognize greenwashing in your supply chain

Customer bases are more aware than ever of sustainability; 43% of consumers actively choose brands whose environmental values ​​match theirs and they will not hesitate to switch to a competitor if this is not the case. For consumers, the actions of a company’s partners have repercussions on the company itself, so companies need to be vigilant.

To identify greenwashing in their supply chains, organizations can examine the motivations behind green choices by suppliers. For example, if their priority is to save money rather than preserve the environment, it is important to question the long-term sustainability of the decision. While it is vital to achieve sustainability in all senses of the word, including economic, environmental and infrastructural, the best investments must balance all these factors appropriately. Moreover, a supplier who overestimates the value of a sustainable product or service without offering information to validate it is also a red flag.

Demystifying the supply chain is more than achievable thanks to innovative green technologies based on AI. By integrating data feeds from satellite vendors, AI is able to detect and predict vendor anomalies. By analyzing continuous data flows, AI technology alerts companies to any unexpected issues, providing a better understanding of risks and authenticating the sustainability of the entire supply chain.

The advantages: truth and transparency

Large or medium scale companies often need complex global supply chains, which reinforces the need for a single, unbiased version of the truth. Using an advanced AI-enabled platform provides a seamless and streamlined process to achieve sustainability goals. AI-powered predictions leverage multiple audit trails and data sources to recognize gaps, mitigate potential risks, and ensure compliance. For example, they can prove that suppliers are using green energy in various regulatory markets and provide clear oversight – with data and knowledge graphs – to relevant stakeholders.

Additionally, artificial intelligence and machine learning algorithms can identify potential disruptions that can physically impact supply chain operations, such as floods or earthquakes, for example. When supplemented with climate data, AI algorithms are able to correlate demand with seasonal variations to predict potential outages in real time. Sophisticated modeling also simulates price dynamics and events to demonstrate the economic and business outcomes of various scenarios. Ultimately, using AI technologies, supply chain leaders can gain actionable insights to ensure all partners are aligned with the company’s green goals.

The future: preserving sustainability

Keeping an eye on long-term sustainability is essential when removing greenwashing from supply chains. The real-time intelligence offered by AI provides businesses with short- and long-term forecasts, along with the prescribed actions mentioned above. In addition, the transparency that green technology offers companies helps build a mutual understanding of goals and a unified approach to achieving them.

Although business decisions are often influenced by a range of perspectives and interest groups, having a clear view of the supply network’s results helps form a balanced strategy that meets all needs. From green energy to responsible consumption and production, AI enables companies to cross-reference and quantify results through interconnected goals and targets. In this way, an organization can effectively protect its sustainable commitments and guarantee its suppliers compliance with its green standards.

As greenwashing is counterproductive for true sustainability, companies need to carefully monitor and optimize their supply chains, so that all partners support their policies. AI technology is essential for obtaining transparent, real-time information on the results of suppliers’ green decisions, verifying their compliance with a company’s own initiatives, and taking informed action that maintains a positive impact. It is only with these sophisticated analytical and predictive capabilities that organizations will be able to achieve true sustainability in all its forms.

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