BUSINESSES SEE FINANCIAL REWARDS FROM MAKING THEIR SUPPLY CHAINS GREENER

Stocks and Financial Services Press Releases Monday December 3, 2018 18:36
Bangkok--3 Dec--HSBC Thailand
  • Businesses around the world are reappraising their supply chains to be more sustainable, driven by expectations of financial rewards
  • Transparency is key when selecting new suppliers as 85% of businesses want to achieve a sustainability standard recognised by their industry
Businesses have complex ecosystems of global supply chains and are now looking to sustainability to unlock new financial benefits.

A new HSBC survey of more than 8,500 companies in 34 markets, 'Navigator: Now, next and how for business', has found a trend of businesses making sustainability changes in their supply chains to improve their bottom lines.

Almost a third (31%) of companies globally plan to make sustainability-related changes to their supply chains over the next three years. Of those making ethical or environmentally sustainable changes to their supply chains, cost efficiencies (84%) and improved revenues and financial performance (also 84%) are the main motivations.

This trend comes as companies face increasing pressure from customers to be more sustainable and transparent about their sourcing. With around 80% of a company's environmental impact found in its supply chain1, the 'green' credentials of strategic suppliers and partners are critical factors in a firm's reputation and performance.

Bryan Pascoe, Global Head of Client Coverage, HSBC Global Commercial Banking, said: "As businesses explore and invest in ways to stay competitive for the future, the most forward thinking are already taking action. Transitioning to become more sustainable is not only beneficial for the environment and for society, but for the bottom line too."

Transparency is a key criteria for more than a quarter (26%) of companies when seeking new suppliers, according to the survey, as consumers increasingly want to know where the products they buy come from and how people, animals and the environment have been treated during production.

Added to this, regulators and investors are putting more pressure on companies to disclose their sustainability practices, which explains why 85% of businesses want to achieve a sustainability standard recognised by their sector or market.

In response, companies in emerging market countries are particularly keen to increase their ethical and environmental standards2. More than one in five (21%) businesses based in emerging markets plans to make improvements over the next two years, compared with 15% in developed markets.

As one in five (20%) companies say they have taken greater control of their supply chains over the last two years, this presents a timely opportunity for businesses to assess their networks and take action to become more sustainable, which can help them remain competitive in an increasingly demanding trading environment. Some are already getting results, with 17% claiming to have reduced their impact on the environment over the last two years.

The transition to a more sustainable future has many benefits to businesses – and banks have a role to play too. HSBC's network, financial expertise, tools and connections support businesses of all sizes to take the steps needed to become more sustainable and remain competitive in today's world.


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