T H E 1 2 T CEOS RECOGNIZE THE NEED TO RE-EVALUATE SUSTAINABLE BUSINESS MODELS ARE H U Case Study Case Study N I T THE GLOBAL DEPENDENCIES IN THEIR BUILT ON RESPONSIBLE SUPPLY CHAINS E ADM NOVO NORDISK D N SUPPLY CHAIN A T Focusing on a sustainable supply chain is a critical I O N As CEOs are looking to reimagine their supply step for CEOs to address other sustainability S G Building Supply Chain Resilience Circularity in Pharma L chains, they are also evaluating how to best priorities, such as lowering greenhouse gas (GHG) O B A build resilience. As part of this process, business emissions (50% of CEOs are prioritizing this) or L C ADM, a multinational food processing Novo Nordisk, a Danish multinational O leaders are exploring how to improve global reducing Scope 3 emissions (34% are taking this M P company, is a leader in supply chain visibility pharmaceutical company, is embedding A structures while considering the possibility of action to build resilience). Leading companies are C T - and resilience. ADM procures crops from an end-to-end responsible business model A embracing regionalization. going a step further, embedding circularity in their C C a global network of farmers; transports by considering healthcare’s sustainability E supply chain to enact radical change. N T the crops to places in need around the impacts across different stages of the product U Approximately one quarter (21%) of CEOs are R world as well as to crop storage facilities lifecycle. One area of focus for Novo Nordisk is E C turning to localization to build resilience. CEO Nearly half of CEOs (49%) are transitioning to E and processing units; and then to global medical device waste. To reduce their impact, O S of Grupo Herdez, Héctor Hernández-Pons Torres, circular business models to build resilience, with T U customers. ADM’s unique footprint allows Novo Nordisk is piloting a model for a cross- D them to continuously manage through supply notes, “The pandemic made us see that the local CEOs in the chemicals sector adopting circularity industry take-back program in a range of Y 15 and regional approach is more important than at the highest rates (64%). CEOs view circularity and demand imbalances to ensure crops we thought. Now more than ever, it is important in supply chains as a guardrail to protect against countries, with the goal of reusing components get to where they are needed most in the to diversify supply sources and long-term market and geopolitical volatility, as well as proactively such as glass, plastics, and metals from world. Throughout this process, they have relationships with all members of the value chain.” mitigate resource availability risk. By reusing injection pens after disposal by patients. incorporated multiple redundancies to build materials from existing products, companies can Novo Nordisk actively engages with patients supply chain resilience. For instance, ADM Other CEOs are exploring how to strengthen reduce their materials cost, limit their impact on the and providers to educate them about the has multiple transportation options available their global supply chains, with 37% of CEOs environment through resource extraction, and importance of adopting circular business models at a moment’s notice: if shipments can’t duplicating and diversifying elements of their maintain greater control over their supply chains. and lowering their environmental footprint. be transported via barge, rail cars can be supply chains to build resilience. Verizon’s Managing Director of South East Water (Australia), deployed, and if the railway is not an option, Chairman and CEO, Hans Vestberg, states, Lara Olsen, shares, “As we see more volatile events, Novo Nordisk is also reviewing their entire trucks are on standby. Having these types of “We spend an enormous amount of time on we’re starting to look at where our waste goes product portfolio, rethinking fundamental redundancies allows ADM to have an agile securing our supply chain – all the way from and how to try to re-use as much as possible from products and operations. For example, by supply chain that can pivot instantaneously. high-end products, to very, very small things a circular economy perspective. Our customers focusing innovation efforts on less frequent It also enables them to support food security, like bolts and screws. We’re not only making expect this as well.” Malek Sukkar, CEO of injections in diabetes care, a patient will need safety, and traceability throughout, which is sure to have redundancy built in, but also that Averda, adds, “The localization of supply chains fewer devices. Another focus area for the deeply appreciated by customers, and enables we have diversity in our supply chain.” supports circularity, and can also help boost job company is innovation in durable devices, ADM to create a competitive advantage.opportunities in local markets. Circularity can be which can be used for a longer period of time. SUPPLY CHAIN VISIBILITY LIES AT THE a great force of equalization in the world.”In both cases, treatment will be less resource HEART OF SUSTAINABLE SUPPLY CHAINS intensive and the environmental footprint smaller. However, to truly be a sustainable business, social Whether they choose to focus on a global or local impacts and human rights must also be taken into model, CEOs are prioritizing sustainability when account. CEOs are increasingly aware of supply improving their supply chains. Nearly half (47%) chain social impacts that they need to address, of CEOs state that building a responsible supply such as promoting human rights and paying a chain is part of their sustainability strategy, living wage. More than half (54%) of CEOs are particularly in Asia and Oceania (51% and strengthening visibility into the social impacts of 59% respectively). their supply chain, with agriculture and high tech CEOs leading the way (63% and 62% respectively). A key underlying factor to improving supply As José Ramón Vicente Rull, CEO of HLA Group chains is supply chain visibility. Ramesh S. & Managing Director of HLA Moncloa University Ramakrishnan, Chairman of Transworld Group Hospital, describes, “In the past, society was okay notes, “I see more and more CEOs delving into with a business providing a product or service their supply chain. What has become clear, regardless of its environmental or labour impacts. however, is that everyone is lacking visibility. Now, it is table stakes for company leaders to think Supply chain transparency is just not there.”of societal impacts of their business operations.” 15. For further information, please reference our Industry Insights 46 beginning on page 88. 47