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Supply chain professionals in Oceania are facing the challenge of meeting decarbonisation targets and sustainability demands from consumers. In our previous article, we highlighted the need for businesses to optimise their energy usage through the appropriate energy source, distribution, storage and demand management.
Over the last two years, advancement and new insights in abatement technology and infrastructure have led to a growing network of EV charging points, increased biofuel availability, and innovations in electrification. Meanwhile, the carbon-intensive practices of suppliers are increasingly being scrutinised and addressed by buyers.
The EY Future Consumer Index reveals that more consumers care about sustainable consumption habits, and 73% believe companies need to lead the way in achieving better social and environmental outcomes. This requires:
- More visibility in supply chains using systems and data, which allows for better identification of sustainability-related risks and opportunities across the supply chain network and tracking success to set then manage emissions targets.
- Increased reporting capabilities to comply with the evolving regulatory landscape, to forecast expected changes into the supply chain management as those who do not adapt to the changes are likely to be forced into action regardless.
Driving sustainability efforts, specifically on activities relating to the transition to net zero, is a priority for supply chain professionals in FY25.
Nathan Roost
EY Oceania Supply Chain & Operations Leader
For companies with 2030 decarbonisation targets, less than six years remain to action complex strategies to reduce carbon emissions.
To learn more about how Australian businesses work towards becoming more sustainable through sustainable procurement, read The sustainable supply chain ambition study that EY Australia co-authored with UN Global Compact Network Australia (UNGCNA).
The Australian Sustainability Reporting Standard (specifically AASB S2) is now mandatory for large Australian businesses. Scope 3 supplier emission disclosure obligations will be mandated for certain (Group 1) companies from 1 Jan 2025, with other companies to follow. Is your business ready for the change?
Reach out to start a conversation on how EY teams can help your business to:
- Efficiently stand up and continuously improve the reporting, including sustainability data requirements.
- Revise your business model to include carbon-based assessment for supplier selection and management.
- Leverage the same data to optimise your supply chain with better visibility, for more strategic and informed decisions.
Summary
By prioritising active carbon reduction and implementing efficient reporting practices to increase visibility, supply chain professionals can effectively navigate the challenges of decarbonisation, comply with sustainability demands, and drive positive social and environmental outcomes across the supply chain.
The views expressed in this article are the views of the author, not Ernst & Young. This article provides general information, does not constitute advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Liability limited by a scheme approved under Professional Standards Legislation.