Let me tell you how most companies handle sustainability today.
A dedicated ESG or CSR team produces an annual report. It gets reviewed by the CFO, approved by the board, published on the website. A small number of commitments are made. Carbon offset programmes are purchased. And then, for the other 364 days of the year, the business operates roughly as before.
This is no longer sufficient. And the window for treating it as sufficient is closing faster than most executives realise.
From Aspiration to Regulation
The COP climate summits — COP26 in Glasgow, COP27 in Sharm El-Sheikh, and onwards — have done something important: they have created an international commitment architecture that is now being translated into national regulation and corporate disclosure requirements.
The EU’s Corporate Sustainability Reporting Directive (CSRD) now requires large companies to report on sustainability in the same way they report on financial performance. The SEC in the US has moved toward mandatory climate disclosure. Singapore, where I’m based, has its own sustainability reporting frameworks tied to the SGX listing rules.
What this means in practice: sustainability is becoming a compliance issue, an audit issue, and increasingly a credit and investment issue. ESG ratings now influence cost of capital. Supply chain sustainability practices influence procurement decisions by large multinationals. In some industries, your carbon footprint is already part of the tender scoring.
The CSR team cannot handle this alone.
Why Supply Chains Are the Battleground
Here’s a number worth knowing: for most companies, 70 to 80 percent of their greenhouse gas emissions sit in Scope 3 — the emissions generated by their supply chain, not their own operations.
This is the emissions that come from the suppliers who make your raw materials. The factories that produce your components. The logistics partners who move your goods. The end-of-life disposal of your products.
You cannot significantly reduce your carbon footprint without addressing your supply chain. And you cannot address your supply chain without your supply chain leadership being directly involved in the sustainability agenda.
This is why I increasingly see sustainability showing up not just in CSR reports, but in S&OP discussions, supplier evaluation criteria, network design decisions, and logistics strategy reviews. The companies doing this well are not treating sustainability as a separate workstream. They’re embedding it into the core operating model.
The Competitive Dimension
There’s an argument I hear from some executives: “Our customers don’t really care yet. Our shareholders aren’t pressing hard enough. Why move faster than we have to?”
I understand the logic. I disagree with the conclusion.
The companies building sustainable supply chain capability today will have a structural advantage in three to five years. Here’s why. When regulatory pressure intensifies — and it will — companies that have already built the measurement systems, supplier relationships, and operational changes to support lower-emissions supply chains will adapt quickly. Companies that have waited will face a compressed timeline, higher costs, and supplier relationships that haven’t been built for this purpose.
Early movers also get to define industry standards. If you are a large buyer in your industry and you start embedding sustainability criteria into your supplier selection process, you shape what good looks like for your entire ecosystem. That’s competitive advantage.
What Practical Action Looks Like
I want to be concrete here, because the sustainability conversation often becomes abstract.
Start with measurement. You cannot manage what you cannot measure. Most organisations still don’t have reliable Scope 3 data. Getting it is hard — it requires supplier engagement, data sharing agreements, and often some estimation. But without it, everything else is guesswork.
Prioritise your highest-impact categories. Not every supplier contributes equally to your carbon footprint. Identify the top 20% of suppliers or categories that account for 80% of your supply chain emissions. Focus there first.
Embed sustainability into supplier evaluation. Carbon performance, alongside quality, cost, and delivery, should be part of how you score and develop suppliers. This signals seriousness to the market and creates real incentives for suppliers to improve.
Connect sustainability to supply chain design. Network design, transportation mode choices, and manufacturing location decisions all have significant sustainability implications. These need to be made with sustainability as a first-class input, not an afterthought.
The Question Worth Asking
I’ll close with a question I pose to supply chain and operations leaders: if your company’s carbon targets were made legally binding tomorrow, how much of your supply chain would need to change, and how long would it take?
If you don’t know the answer, that’s the first problem to solve.
Kaushik Ghatak is a certified sustainability expert and supply chain strategist. He runs sustainability capability development programmes using The Triple Connection simulation, and advises organisations on sustainable supply chain strategy.