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Walking the walk: Driving competitiveness through ethical supply chains

How sustainable supply chain operations can increase competitiveness through improved profit, risk and brand reputation


Operating ethically and operating profitably are no longer mutually exclusive concepts. Leading companies are “walking the walk,” balancing the goal of achieving profitability with gaining social and environmental advantages.

Companies stuck in a mindset of “what’s the minimum I need to do” are missing out on opportunities to use ethical business practices as an integral part of what makes them unique.

Achieving responsible and profitable supply chains is about gaining a triple advantage: Creating a clear business case for corporations, as well as benefits for the environment and society. Those focused on this “triple advantage” in supply chain operations can increase competitiveness through increased revenue and brand reputation while decreasing cost and risk.

Key Findings

Companies that talk about sustainability instead of actually shaping responsible supply chains will begin losing their ability to grow and compete.

Social media puts businesses under the lens for their practices, and they may feel a reaction from a global customer base that will “vote with their wallets.”

Reputable analyst firms are increasingly factoring ethical behavior into their valuations, and sustainability can create significant impact on stock prices.

Ignoring business sustainability may make it difficult to attract and retain new talent. Millennials consider sustainable practices to be essential, and 46 percent of CEOs reported that employees would be among the most influential groups in guiding their action on sustainability over the next five years–-second only to consumers.

Companies that don’t embrace responsible supply chain practices risk falling behind and losing a competitive edge they may never regain.


Companies must move beyond the concept of sustainable business practices as a noble purpose and instead embrace them as a strategic weapon wielded to gain an advantage. To do so calls for getting the numbers straight and building a clear business case for investments. Businesses must also pass by “trial and error” approaches and go straight to proven methods. Decision support tools can help a company to compare its current portfolio of initiatives and identify ways of prioritizing supply chain investments.

It also is key to collaborate on sustainability issues across an extended value chain of internal stakeholders, suppliers, sub-contractors and the end consumer. By working together, companies can find new ways of achieving social, environmental and economic gain, and ultimately create a competitive advantage.

Ethical Supply Chains

Companies who hesitate to embrace sustainable practices as a strategic weapon do so at their own peril: More and more customers, investors and employees demand ethical operations.

By positively impacting socio-environmental factors, the biggest benefit lands on the bottom line through new sources of growth and innovation.



Strategic Purpose:

This tool constitutes an investment decision framework for COOs, Supply Chain and Sustainability Leads to tune their supply chains towards a “triple advantage”–-realizing both commercial and socio-environmental benefits simultaneously. It allows identifying whitespots or improvement areas in a supply chain/ sustainability agenda to exploit further competitive advantages.


  • The prioritization matrix is based on a “triple advantage index” (shared value created) and a dynamic ranking of top 10 supply chain practices.
  • The tool considers the individual importance of sustainability in the business strategy and factors in the companies aspirations on revenue, cost, risk, brand as well as exhaust, health, community benefits and labor standards.
  • The recommendations are backed up by detailed assessments of 31 supply chain practices, modeled and validated with more than 25 multinationals in a study together with the World Economic Forum.

Investment Prioritization

Business and Socio-Environmental Values

Step 1
  Please estimate the relative importance of sustainability in your business strategy.

50 %
% 50

Step 2
  Please assign value weightings reflecting the aspired outcomes of the supply chain sustainability strategy


Revenue Growth %
Cost Reduction %
Risk Mitigation %
Brand Image %


Exhaust %
Health %
Community %
Ethical %

Strategy Key

  •  Efficiency
  •  Holistic
  •  Legitimacy
  •  Risk Mitigation
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