Advancing Equity Through a Reimagined Supply Chain
Developing climate-resilient jobs will mean finding ways to connect with and support the millions of micro-, small-, and medium-sized businesses (MSMEs) that feed into global supply chains.
A Catalyst in Our Collective Journey Toward a Climate-Resilient Future
“33% of companies lack a business case for sustainable supply chains and nearly half of respondents said their companies are struggling to measure the return on sustainable supply chain activities.” Source: EY
The Evolution of Supply Chain Engagement Supply chain management has evolved beyond the logistics of moving products from point A to point B. It has now become an indispensable strategic function that governs a company's competitiveness, reputation, and environmental footprint.
As businesses pivot towards sustainability and grapple with the demands of a warming planet, supply chains emerge as a linchpin in the creation of climate-resilient jobs that drive economic advancement for workers and deliver profitable outcomes for businesses.
The Nexus of Climate Change and Workforce Development Climate change reverberates and reshapes entire industries and economies, rendering some jobs obsolete while creating new opportunities. As supply chains become more global and complex, people around the world will need the skills necessary to thrive in a green economy.
Training and upskilling workers — especially for people of color and people from low-income backgrounds — can help bring the benefits of more sustainable supply chains to businesses and communities. Equitable Economic Advancement: A Shared Vision Climate-resilient jobs should foster equitable economic advancement. With intentional local action and support, the green economy offers a chance to level the playing field, opening doors to quality employment for marginalized communities, people of color, and individuals from low socioeconomic backgrounds. Reimagining the supply chain plays a pivotal role in ensuring that this vision becomes a reality.
To build an equitable supply, companies of all sizes, from micro-, small- and medium-sized enterprises to large corporations, need to collaborate and innovate together. By listening to MSME voices and addressing their needs and pain points, large companies can ensure that they solve the most pressing issues affecting suppliers, their workers, and their communities.
The Business Case for Climate Action Large companies often ask businesses along their supply chains to comply with reporting goals, emissions reductions targets, and production standards. Fundamentally, MSMEs want to comply. Improving product quality and reducing pollution increases product value, which maintains positive relationships with their buyers.
Failure to do so puts their own business at risk as larger companies can procure necessary goods and services elsewhere. However, adhering to large companies’ goals takes significant investment of resources and time — both in short supply for MSMEs that face more immediate challenges like keeping the lights on and hiring and paying workers.
As climate change ushers in unprecedented challenges, MSMEs find themselves at a crossroads. The path ahead is fraught with risks, but it's also laden with opportunities to pioneer climate-resilient jobs. Climate change poses severe risks to MSMEs, including damage to infrastructure, increased financial risks, regulatory uncertainties, market fluctuations, and supply chain disruptions. Ignoring these risks would be akin to steering a ship into a storm without a compass.
Challenges, Barriers, and Progress Several obstacles stand in the way of MSMEs embracing climate-resilient practices. These include a lack of awareness about climate risks, training gaps, and limited knowledge about green finance markets and low-carbon technologies. The road to resilience is paved with knowledge and investment.
Amidst these challenges, collaborative leadership emerges as a beacon of hope. Some companies, industry associations, government bodies, and the private sector are uniting with MSMEs to foster climate resilience among MSMEs. While important steps are being taken, more needs to be done. The exchange of knowledge is key to fostering climate resilience. Platforms for sharing adaptation solutions, best practices, and success stories need to be established. Learning from each other's experiences can accelerate progress.
“Almost half of all CEOs now see supply chain responsibility as part of their sustainability strategy.” Source: Accenture
Creating Effective Clean Energy Partnerships
It can sometimes seem like a David and Goliath battle as micro, small, and medium suppliers work to meet clean energy goals with the large corporations they want to do business with. Eliot Metzger, director of sustainable business and innovation for WRI, says it’s often been a push-pull battle toward compliance. There is still work to do, but Metzger is encouraged that some successful corporations now see the benefit of working in partnership with their suppliers toward a transition to clean energy. He cites companies such as Ikea, Walmart, and Mars as examples of corporations that are shifting to the partnership model to build on their success.
Centering MSMEs in Supply Chain Solutions
MSMEs must be a part of the supply chain management conversation. Otherwise, MSMEs’ ability to understand environmental risks limits their ability to help develop and implement climate-resilient, supply chain strategies — negatively impacting equitable access and the sustainability of livelihoods. WRI aims to close that knowledge gap by determining what is missing to create a more level playing field for supplier-buyer relationships. Early insights from WRI research on corporate supply chain goals suggest a huge blind spot when it comes to equity challenges. Most corporate goals push or pull suppliers to help the larger companies hit their environmental targets. Few goals, perhaps as few as 10%, are designed to help suppliers transform their operations or reskill their workers. Those are the essential, but missing, pieces to a climate-resilient future.
Strengthening the Supply Chain Through Meaningful Investments
Only a small percentage of large companies set supply chain sustainability goals in partnership with micro, small, and medium enterprises that help make their products. Corporations can strengthen their supply chains by investing in MSMEs, so that their workers become more economically, socially, and climate resilient.
The Future of Fashion: Every Job a Green Job
Remake describes itself as a global advocacy organization fighting for fair pay and climate justice in the clothing industry. Becca Coughlan, the group's senior advocacy manager, says designers, buyers, merchandisers, and everyone making decisions on garments should be thinking about sustainability and recycling.
She also thinks garment production itself needs to be reduced to prevent waste. With that shift, Coughlan sees a just transition for garment workers who could then be reskilled for new green jobs in the industry.
Resilient, Inclusive and Sustainable Enterprises (RISE): Building Future-ready MSMEs and Workforce
With increasing sustainability demands and economy-wide low carbon transitions, MSMEs in India will need to adopt climate-friendly practices or change business operations and products to stay competitive and protect livelihoods. This will require reskilling of workers and institutional support for MSMEs.
Resilient, Inclusive and Sustainable Enterprises (RISE) – part of the CREST initiative – aims to help build the resilience and competitiveness of MSMEs in the automotive cluster in Tamil Nadu and the textile cluster in Gujarat, while enabling an inclusive and just transition to a low carbon future.
By 2026, under RISE, WRI India will engage with MSMEs and local communities, industry associations and experts, skilling and financing agencies and local and national governments to support at least 1000 workers in 100 MSMEs to help them manage climate impacts, implement climate actions and acquire skills for better livelihoods.
