"Supply chains crucial for sustainable business"

Carbon emissions accumulate throughout the different stages of the products’ life-cycles. Companies are therefore working to reduce environmental impacts of their production. According to Misuse PhD student Serafim Agrogiannis’ on-going research on sustainable supply chains, sustainable sourcing is crucial in facilitating the transition towards a greener economy.

Interview by Emilie Eliasson Hövmöller, published March 2016.

Corporate sustainability has been gaining momentum in the last decade and the nature of business success is being redefined. Competition has shifted focus; sustainable supply chains are increasingly giving companies a competitive edge. Sustainable sourcing is at the frontline and considered business critical in attaining sustainability objectives within firms and across their supply chains.

- Sustainable sourcing is literally the sustainability ‘’gatekeeper’’ for companies and their supply chains, says Serafim Agrogiannis.

Serafim Agrogiannis, who is in his third year of the PhD studies at Misum, has eleven years of working experience in auditing and sustainable supply chain managemant in public and private sectors in Greece, he holds a B.Sc in Supply Chain Managemnet, an MBA with specialization in accounting and auditing and an M.Sc in project managemant and operational development. He is particularly focusing his research on critical sourcing competences and how these competences affect the deployment of low carbon supply chain practices.

- I consider this subject of particular importance, since business organizations and their supply chains constitute one of the cornerstones towards achieving a more sustainable market.

The results of Serafim Agrogiannis research show that sourcing could facilitate a transition towards more sustainable business throughout the whole product life-cycle. There are four key areas in driving this transition:

1) Supply of raw materials and components. Use of eco-efficient transport modes, consolidation of shipments, selection of suppliers based on their sustainability profile, and co-operation with suppliers to improve their sustainability performance.

2) Production. Replacement of hazardous material and processes and reliance on recycling materials, and participation in product design for achieving eco-efficient production.

3) Distribution. Choice of environmentally-friendly distribution channels, design of effective return systems, and decisions about re-using packaging materials.

4) Energy intensity. Mitigation of supply risk of energy as a resource for effective and efficient supply chain operations as well as ensuring renewable energy generation through green investments and procurement of renewable power.

According to Serafim Agrogiannis, government initiatives should center on substantial fossil fuel reductions towards achieving a reduced ecological footprint. This in turn poses challenges and requires actions with regard to energy usage throughout the supply chain (transport and logistics, production and the reuse of products).

- It is important to apply appropriate carbon mitigation measures. Policy makers need to incorporate energy supply, demand, efficiency and related emissions policies to ensure sustainable practices throughout the entire supply chain.

Serafim Agrogiannis stresses the importance of government intervention being adapted to the specificities of each industry. For heavy polluting industries, efforts need to concentrate on efficiency improvements through cleaner production, energy audits, and capacity building programs on energy saving awareness. For sectors with higher energy consumption, there needs to be an alignment between greening the supply chain efforts and the subsequent final demand.

- In these cases, market-based instruments such as sectoral financial subsidies, preferable tax rates or low bank loans could be employed. This in order to adjust energy consumption along supply chains according to final demand and consumption.

Serafim Agrogiannis also emphasizes the need for regulative bodies to rethink their role and build insight on how to efficiently coordinate sustainability actions.

- We need to better comprehend the interactive role(s) of civil governance, business co-regulation and private governance forms.

Serafim Agrogiannis points out that a sole disciplinary research approach is not sufficient in sustainability science. Relevant knowledge is multidisciplinary and involves for example the natural, engineering and management sciences. And as a term, sustainability includes complexity and heterogeneity.

- Only complexity can deal with complexity. I feel privileged that this is a value guiding research in Misum as well, where there is strong support of multidisciplinary research.

Serafim Agrogiannis argues that sustainable markets include a multitude of actors and institutions, subject to a variety of contextual differences across different business and social environments. The overarching principle of sustainability reflects an increased interconnection.

- It is like the game of Domino. You can put each individual piece in the right order and as long as it is treated in isolation it seems fine. But in the wider context, if not all pieces are seamlessly assembled, the whole structure might break down. For example, one cannot demand from businesses to make their production systems more sustainable without considering the customers’ and consumers’ consumption patterns or the role that state governments and transnational institutional bodies can play.