Katharina Cavano l Palladium - Dec 21 2021
Green Ecosystems and Local Supply Chains: Corporate Sustainability Trends for 2022

In a year that was promised to be better than the last, organisations, individuals, and governments alike are facing the fallout following a difficult and tumultuous year. Despite it, one thing remains the same, organisations must shift towards sustainability in all facets of their business, be it due to increased societal pressure or keeping up with a shifting, greener market.

Looking towards 2022, Palladium’s Director of Thought Leadership Eduardo Tugendhat shares his insights into what he expects to see across corporate sustainability in the new year.

Greening Corporate Ecosystems

While organisations continue to set carbon and greenhouse gas targets for 2030, according to Tugendhat, many of them are struggling with scope three emissions, those emissions from assets not owned or controlled by the organisation.

“For many companies, it’s the supply chains that become a problem,” he explains. “Suppliers often represent a significant part of the carbon liability and where companies really struggle is how to work with the rest of the supply chain in getting that reduced and changed.”

Doing so will require a significant transformation. “What we’ve seen lately is that corporations are asking suppliers to find solutions for improving the way they work,” Tugendhat says. “That transformation is definitely possible, but it will be disruptive and it’s going to take some big changes.”

But there’s no one-size-fits-all solution for implementing those changes.
Tugendhat shares the example of food, natural fibre, and wood companies which are facing both a challenge and an opportunity in encouraging those working closest to the land and the water to adopt better practices. “This can be a big part of the solution,” he adds.

“Agriculture and forests can either be major carbon sinks or major carbon and methane sources. Part of what we’ve been doing with more and more corporations is looking for ways to monetise and incentivise good practices on the ground, which regenerates landscapes while putting money in the pocket of the farmers and landowners.”

Labour Shortages and Upskilling

Thanks to compounded labour issues from COVID-19 and the effects of the pandemic on the economy, Tugendhat notes that we’ll see issues with skills mismatch, “There are a lot of jobs available and a lot of people who need jobs, but there’s a mismatch between the workforce’s skills and those needed for open jobs.”

This challenge is two-fold. “Most of this is about having the right kinds of skills and competencies, but people are also thinking differently about their work and who they’re working for.”

“Young people want to work in responsible companies and if companies don’t get their act together on transforming the way they do business, they may struggle to hire,” he adds.

He notes that the onus is on corporations to ensure the growth of their employees while they’re employed, or even before they join. “Organisations and sectors as a whole need to take a more proactive role in working with education service providers and the like to ensure they’re getting people who are developing the basic competencies and skills to get into the jobs. Then, the companies can do further internal training.”

Shifting Supply Chains and Continued Disruptions

Supply chains are making headlines and while the public is concerned with receiving their gifts in time, Tugendhat notes that supply chain disruptions are likely to continue long past the holidays. “In the short term, it’s more due to COVID-19 than anything else, but in the long term we come back to the same sustainability issues.”

It's all related, he says, from corporations looking to improve their ecosystems to the lack of skilled labour, and disrupted supply chains are one of the side effects. “Thanks in part to carbon and sustainability issues, and trade friction with other countries, organisations are looking to how they can bring more of their supply chain closer to home.”

In doing so, Tugendhat adds that they’re running up against the workforce skill issues. “If organisations try and bring it closer to home or shorten that supply chain, they still need the right workers, and many countries just don’t have those people or the infrastructure to support it.”

He predicts that over time as more corporations shift their ecosystems, the technology, workforce, and infrastructure will catch up, but that it may mean continued delays and sticking points in large supply chains.

So, while it’s good news in the bigger picture that more corporations are taking action on sustainability commitments, 2022 may see the short-term fallout of what that action means for the workforce, supply chains, and surrounding infrastructure.

For more information, contact info@thepalladiumgroup.com.