by David Correll and Ken\u00a0Cottrill<\/p>\n
A concept called \u201cjust transition\u201d is cropping up in sustainability circles, and if it gains ground, it could become part of corporate pledges akin to those that commit companies to net-zero operations by a certain year. Such an outcome has significant implications for supply chain sustainability.<\/p>\n
Is just transition another short-lived buzzword that will have minimal impact on supply chain operations, or is it something more substantial?<\/p>\n
There are various interpretations of just transition. The European Bank for Reconstruction and Development<\/a> frames it this way: \u201cA just transition seeks to ensure that the substantial benefits of a green economy transition are shared widely, while also supporting those who stand to lose economically\u200a\u2014\u200abe they countries, regions, industries, communities, workers or consumers.\u201d<\/p>\n In deciding whether or not just transition will endure, it is worth considering it in the context of how such concepts evolve and take root. Joel Makower, Chairman and Co-Founder of the sustainability journal GreenBiz<\/em>, lays out the evolutionary path of buzz phrases and the prospects for just transition in a recent opinion\u00a0piece<\/a>.<\/p>\n According to Makower, the path starts when a new term or concept becomes \u201ctable stakes inside companies.\u201d Eventually it is \u201cwidely used, overused, and possibly abused\u201d and applied indiscriminately, he says. Next, a backlash is triggered that draws the term\u2019s credibility into question, followed by a revival as professionals in organizations such as consultancies step in to benchmark the term and enshrine it in best practices. \u201cWe\u2019ve seen this movie before,\u201d he says, notably with the \u201cnet zero\u201d\u00a0idea.<\/p>\n Just transition is in the momentum-gaining phase, Makower argues. For example, a Just Transition Declaration<\/a> was signed by 16 governments in October 2020 at the COP26 conference in Glasgow, Scotland. Which means, he suggests, \u201cWe\u2019re setting it up for a fall\u201d and possibly a revival and ultimate acceptance.<\/p>\n If this prediction turns out to be true, what are the implications for supply chain sustainability?<\/p>\n There are signs that just transition is entering the supply chain sustainability space. For example, at the COP26 event, United Nations organizations and the shipping industry launched a Just Transition Maritime Taskforce<\/a> to \u201cdrive decarbonization of the industry and support millions of seafarers through shipping\u2019s green transition.\u201d<\/p>\n There are multiple ways in which just transition could have an impact on other areas of supply chain sustainability.<\/p>\n One example is the transition to green freight transportation, and more specifically, how the adoption of fuel-efficient vehicles and practices could have negative outcomes for labor. For instance, it is argued that regulations in California that require trucking companies to convert to fuel-efficient engines impose extra costs on owner\/operators that could force many of them out of business. A just transition to more sustainable vehicles could level the playing field and make the cost of fuel-efficient diesel engines less onerous for small operators.<\/p>\n Another example in the freight transportation space is Carbon Offsets for Freight Transport Decarbonization<\/a>, proposed by our colleagues Suzanne Greene and Cristian Fa\u00e7anha in 2019. The idea is that rather than investing in their own green fleets where the environmental gains are minimal, transportation operators in Western countries could make fleets in developing countries greener through the purchase of carbon offsets. The environmental improvements achieved would be significantly greater, and they would help carriers in developing countries transition to greener freight operations: in effect, a just transition to low-emission transportation.<\/p>\n MIT CTL researchers have also looked at how innovations in freight transportation can improve the environmental performance of operators in developing countries. Chris Caplice and Jarrod Goentzel have developed a framework for assessing the potential impact of adopting various technologies within freight transportation, which will appear in a forthcoming World Bank book, Transformative Technologies in Transport<\/em>.<\/p>\n Outside of the movement of freight, companies in developed economies are putting pressure on small- to medium-sized suppliers to comply with tighter environmental and labor requirements in their supply chains. How can these requirements be enforced without threatening the viability of vendor businesses and\/or forcing them to lay off\u00a0workers?<\/p>\n Also, what supply chain skills will be needed to support the transition to circular supply chains and sustainable sourcing and procurement? How will today\u2019s workforces acquire these\u00a0skills?<\/p>\n The above examples are by no means exhaustive, but they illustrate how the idea of just transition could impinge on supply chain sustainability. It is notable that 27 major companies recently signed a Pledge for a Just Transition to Decent\u00a0Jobs<\/a>.<\/p>\n The rise of just transition also comes at a time when the sustainability of supply chains is coming under increasing scrutiny. As the 2021 State of Sustainability<\/a> report underlines, various stakeholders\u200a\u2014\u200anotably consumers and investors\u200a\u2014\u200aare pressuring companies to improve their supply chain sustainability performance. Moreover, the 2021 report found addressing labor rights issues to be a top concern in the 2021\u00a0report.<\/p>\n To some extent, supply chain professionals already take account of the wider ramifications of their sustainability efforts. However, if just transition goals become as significant as net-zero ones in the corporate sector, practitioners will need to pay more attention to how they support such\u00a0goals.<\/p>\n The annual State of Supply Chain Sustainability report published by MIT CTL and CSCMP helps companies to make sense of the latest trends in supply chain sustainability. The questionnaire for the 2022 report closed in December 2021, and we are in the process of analyzing the responses. We are also conducting executive interviews as part of the research. If you are interested in being interviewed for the report, please <\/em>contact David\u00a0Correll<\/em><\/a>.<\/em><\/p>\n Will \u201cJust Transition\u201d Reshape Supply Chain Sustainability Goals?<\/a> was originally published in MITSupplyChain<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":" by David Correll and Ken\u00a0Cottrill A concept called \u201cjust transition\u201d is cropping up in sustainability…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[1],"tags":[],"class_list":["post-79","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"yoast_head":"\nJust transition permeates the supply chain\u00a0space<\/strong><\/h4>\n
Food for\u00a0thought<\/strong><\/h4>\n