Sustainable Supply Chain Survey 2024

• 71% of Central European companies are already dealing with sustainability, with a further 20% planning to do so.
  
• In addition, 77% of companies have observed specific customer preferences or market trends that indicate a growing demand for sustainable products, services or supply chains.
  
• 57% of companies find it challenging to align business interests with sustainable supply chain practices.
  
• Up to 83% of large companies (revenues over EUR 40 million) see sustainability as a competitive advantage, compared to 54% of smaller companies (revenues under EUR 40 million).
  

Source: Deloitte Sustainable Supply Chain survey

“In practice, I often encounter that companies perceive sustainability, and ESG reporting in particular, as an administrative burden imposed by the EU. Companies are hesitant about their approach, most often because of concerns about high costs, the difficulty of data collection and the sheer complexity of regulatory requirements. However, when the topic is grasped correctly, it usually turns out that a change in mindset presents a huge opportunity for competitive advantage and growth. Companies that are already implementing measures and approaching them not only as a necessary evil, but as a potential to move their business forward, streamline systems and processes, and kick-start innovation, are beginning to reap the first fruits,” Jiří Pavlík is convinced, adding that although changes are often accompanied by increased costs, they will help companies in the long run and the positive aspects will eventually prevail. 

According to the Deloitte expert, fragmentation, or the dedication of only one person to the task, can be problematic because the company will be unable to grasp the topic in its entirety. The turnaround, he says, starts, for example, with a change of approach to the topic at the level of the entire company. He gives the practical example of a separate data or sustainability function on a company's board. In addition, he says, some changes come in such a way that the company's primary goal is to save costs, but ultimately there are interesting implications for ESG as well. This does not necessarily always have to relate to core business and product changes, as the issue can also be viewed through the lens of support areas such as stores, showrooms, warehouses or offices.

„This does not always have to involve a production part, for example, we recently worked with a client on an automatic warehouse door sensor and how to close it faster. It sounds like a trivial detail, but when they open several times a day during the winter months, a few seconds can mean long-term savings of tens of thousands of crowns on heating costs,“ he gives as a practical example. 

• The biggest ESG challenges for companies are increased costs, lack of resources and regulation.
• In 25% of companies, sustainability falls under marketing. 16% of companies have a dedicated function or separate team for the area, followed by R&D (14%), logistics and supply chain teams, and sales (both 13%). Finance, IT, and quality management come last.
  

Source: Deloitte Sustainable Supply Chain Survey

“The whole issue of ESG is not only a necessity, but more importantly a great opportunity. This can consist in, for example, transforming businesses towards reduced dependence on materials through recycling or circular economy, diversifying product portfolios, improving energy performance and other opportunities for innovation or long-term savings. Leaving aside the positive impacts on the planet, nature and society, the push for sustainability will also contribute significantly to building more resilient supply chains and better business in general,” says David Mejsnar, Sustainability & ESG Leader at Deloitte Czech Republic and Slovakia.

“However, if ESG reporting under the CSRD is to be taken to the level of financial reporting, it should not just be marketing or sales material. It is necessary to collect data from the whole company, supply chains, etc. This requires a comprehensive approach and the establishment of a dedicated department is and will be almost inevitable for most large companies,” believes the study co-author and sustainability expert David Mejsnar.

“The findings from our survey only confirm what we often see in practice: while many companies base their decisions on data, it is not always 100% trustworthy. Quality data collection and thorough data analysis are becoming the Achilles heel for many companies. However, corporate transformation in this area is inevitable, and I am convinced that strategic leadership and proactive preparation for these changes will bring – and for many is already bringing – more benefits to companies than waiting, zigzagging or even resisting. The area of sustainability and ESG is a topic that cuts across companies, industries, business and the economy,” concludes Deloitte ESG Leader David Mejsnar, adding that if a company does not collect data at all, this can be a major problem during an audit, as auditors will not be able to trace the origin of the data and verify its accuracy, which he says can lead to the company facing fines.