The ROI of a sustainable supply chain
Sustainability isn’t a new focus for the construction industry, but one that is gaining more momentum, expedited by growing environmental pressure, the cost-of-living crisis, market conditions and the journey to net zero construction. Reducing the industry’s impact on the environment also has better outcomes for the users of the buildings in relation to both cost and comfort, which is of vital importance.
However, along with these compelling reasons, this article examines the possible return on investment (ROI) that can be achieved from the industry following a sustainable approach.
At Artex, we prioritise sustainability and caring for the environment, and have both the responsibility and ability to reduce the impact of our products at every stage and strive for continuous improvements to how we work.
Why is it important to have a sustainable supply chain?
Climate change continues to move at an incredible pace. The UN’s Paris agreement sets out a goal of limiting global temperature rises to well below 2, preferably 1.5 degrees Celsius. This is a challenging target with huge changes needed to improve energy efficiency in order to achieve it.
Legislation has been set to ensure businesses do their part. With the built environment sector accounting for 40% of global energy emissions, it will play a key role in achieving net zero by 2050.
As well as the environmental and legislative demands that drive the need to have a sustainable supply chain, there is also the opportunity of making efficiencies which can improve ROI and enhance productivity.
A recent McKinsey report highlights, “Today, manufacturers of physical products find themselves on the front lines of sustainability. In part this is driven by customer demands, but also the realisation that growth and future proofing is intertwined with taking steps to reduce waste.”
With low carbon options more appealing to modern consumers, businesses who embrace sustainability will benefit from the growth opportunity it is set to bring.
Consumers now driving the agenda
Sustainable products are in high demand. With six in ten consumers changing their behaviours to address climate change and more than a third stating they are willing to pay higher prices of up to 25% for sustainable companies.
Using Coca-Cola as an example, when the business switched its supply chain in Africa to use local farmers, and took action to empower women to have training and better career options, the brand’s sales and reputation grew as a result.
Working with sustainable partners, in this example, has been proven to make an impact on the bottom line. Preparing for the consumer demand for sustainable products to rise can lead to businesses getting ahead with a competitive advantage.
This added pressure from consumers means those companies with an environmental conscience will be more favourable, increasing their reputation and demand for their products.
Tradespeople and building sustainability
The demand for sustainable products from consumers will impact how tradespeople work, and the products they use. Tradespeople are faced with new eco-centric updates to UK building regulations, forcing them to pay more attention to sustainability, such as the Future Homes and Building Standards.
The Future Homes and Building Standard is designed to ensure new homes built from 2025 produce significantly less carbon emissions in comparison to the old regulations. Tradespeople who are required to work towards these standards will develop a greater understanding of sustainable building practices. However, there may be a need for tradespeople to upskill to ensure that these regulations and government targets can be met.
The 2022 Rated People Home Improvement Trends Report found that 63% of tradespeople were making environmentally-friendly changes in 2022. This suggests high levels of awareness from tradespeople around the role they have in contributing to the sustainability agenda and the commercial opportunities this could bring.
Merchants and retailers are ideally placed to educate tradespeople on the sustainability credentials of different products and solutions from manufacturers and suppliers. Artex is able to offer an extensive range of products that are manufactured to meet the needs of the growing sustainably-aware consumer, and works closely with merchants and retailers to provide stock management support to reduce wastage.
Stacey O’Connor, Head of Marketing at Artex says; ‘We actively work with our bag, film and tub manufacturers to reduce the amount of plastic we use in our packaging. We’ve already transitioned the packaging for our own brand products to include 30% recycled content, and are always looking to switch to more recyclable materials in our packaging like paper and cardboard when relevant to do so.
‘We help merchants manage their stock and reduce waste through our flexible delivery service which allows merchants to buy as little as a single unit of product for delivery within 48 hours, meaning they can order what they need, when they need it.’
Artex, as part of the Saint-Gobain group, has a defined 2030 roadmap to reduce CO2 emissions. The roadmap includes a wide range of initiatives on carbon, water, waste, packaging and the circular economy. It’s something we’re committed to making an impact on and we believe that sustainability can deliver return on investment for the supply chain.