INTERVIEW: “Sustainable supply chains are just good business”

by 30 Mar, 2020

At a time when resource scarcity and management is at the forefront of public consciousness, Professor Lenny Koh’s 20 years of experience researching management of sustainable supply chains has never been more pertinent.

Professor Koh’s name is followed by an extensive list of job titles, as founding director of the Logistics and Supply Chain Management (LSCM) Research Centre, director of the Centre for Energy, Environment and Sustainability (CEES) and the Advanced Resource Efficiency Centre (AREC) at the Energy Institute and Management School at the University of Sheffield. With a Royal Society of the Arts fellowship and PhD to boot.

Behind the impressive number of acronyms is a well-informed but passionate drive for integrating the management of sustainable supply chains to decrease carbon production. The end result is more resource efficient and sustainable companies.

“It is very important for us to think about this issue very carefully. The issue of scarcity of resources, whether these are financial or energy resources, given their limitation and the way that we move forward to the future.”

While the Professor recognises that in the last decade companies’ are increasingly moving towards sustainable development, she thinks more can be done: “Sometimes, these sorts of activities are done only within the boundary of the companies rather than across the supply chain.”

Putting on the pressure

So how do we encourage companies to look beyond their own four walls when it comes to sustainable supply chains? Here, the answer for the Professor is international pressure: like the legally binding targets of zero emissions by 2050.

She says the aim of this pressure is as much about enforcement of regulation, as incentivising companies to do the right thing: “I think what is really important is increasing the pressure from international competition, and then also changes in terms of regulation and policy, encouraging companies and industry to really take on board this sort of issue more seriously.”

“Basically, it is absolutely important to enable a showcase of cutting edge, low carbon technology that can contribute to achieving this target.”

Drop in the (polluted) ocean

Examples of countries showcasing that technology for Professor Koh include China and their investment in sustainable development in the electric vehicle sector, and California’s waste to resource and energy programmes. But these schemes feel like small fish in a very large (and polluted) pond.

According to Climate Action Tracker, which independently tracks government climate action measures against the Paris Agreement, China is paradoxically both the largest developer of renewable energy and the world’s largest greenhouse gas emitter. They account for approximately 27% of global GHG emissions.

The US is not much better. Despite investments in sustainable development by some companies, they have actively shied away, or even sought to undermine, international policy.

Sustainability makes money

So if governments are pursuing conflicting policy agendas that leaves putting pressure on big business. This is a factor Professor Koh feels is increasingly apparent at fossil fuel companies now bowing to stakeholder’s concerns.

“I think increasingly the traditional fossil fuel organization, although large parts of their portfolio are still within the traditional fossil fuel segment of the market, is investing in the renewable or low carbon technology direction.”

“It will bring benefits to the environment, which is excellent, but it will also give sensible returns, and stronger economic and social structures.”

For Koh, it is not just about reducing greenhouse gases and wasting less materials, it goes much further. Sustainable investment doesn’t just placate the environmentalists: it is simply good for business.

“Sustainability is not just about the environment, although the environment will play a very important part of their portfolio. It’s a combination of the benefit to the environment, benefit economically – meaning financially – and also manifesting socially. I think these three dimensions go hand in hand.”

Sustainability and Covid-19

As the coronavirus pandemic continues to escalate, there is more and more unprecedented radical policy being implemented across the world. The issue, Koh says, is that although these reactionary policies are needed right now, no one can predict the long term social, economic or environmental impacts.

“Although the short-term fixes are needed, like the impact of coronavirus which is something that needs to be addressed now rather than in the future, we need to look at this as a longer term issue.”

It’s clear that for Professor Koh the future is always on her mind. Whether that is the economy, or the environment, and she believes that business should be thinking the same way. She also sees passing that mentality on to younger generations as part of that.

“I’m very passionate about this topic, encouraging my group and young researchers in my team to focus on difficulty going forward. So even one day when I get old and retire they will have my work to look back on, and carry on working in this direction.”

New Money spoke to Professor Lenny Koh just before the coronavirus crisis hit with full force in Europe.

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About the author

About the author

Phoebe Davis

Phoebe is a freelance journalist who is passionate about reporting on the human impact of climate change. She is currently studying for her Masters in journalism at the University of Sheffield.