The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.
Supply chains are having a moment.
President Joe Biden issued an Executive Order on America’s Supply Chains on Feb. 24, in which he stated, “More resilient supply chains are secure and diverse — facilitating greater domestic production, a range of supply, built-in redundancies, adequate stockpiles, safe and secure digital networks, and a world-class American manufacturing base and workforce. Moreover, close cooperation on resilient supply chains with allies and partners who share our values will foster collective economic and national security and strengthen the capacity to respond to international disasters and emergencies.”
UN Climate Change issued a Nationally Determined Contributions (NDC) Synthesis Report on Feb. 26, “showing nations must redouble efforts and submit stronger, more ambitious national climate action plans in 2021 if they’re to achieve the Paris Agreement goal of limiting global temperature rise by 2°C — ideally 1.5°C — by the end of the century.”
The report quotes U.N. Secretary-General António Guterres saying that 2021 is a make-or-break year in the world’s effort to confront climate change.
Press reports on Monday indicated that China is taking steps to bolster its domestic supply chains in industries that the government deems strategic, with immediate attention being paid to semiconductor chip manufacturing.
In addition, Wall Street is warming to environmental, social and governance (ESG) investing so much that the CFA Institute is developing a set of standards to guide investment managers. According to a Nov. 22 article published by the Financial Times, the CFA Institute, “the global organisation that hands out the coveted designation of ‘Chartered Financial Analyst,’ recently became the latest body to try to inject order into the space by starting work on a standardised framework for ESG disclosures.” I am a member of the CFA Institute.
That is not all. On Feb. 9, The Wall Street Journal reported that investors and analysts increasingly expect corporations to report ESG information, stating, “Providing frequent updates about the sustainability of their business is becoming more crucial for finance chiefs, as analysts and investors increasingly rely on this information when evaluating a company’s outlook and its creditworthiness.”
The reader will be forgiven for thinking, “OK, Brian. You have mentioned climate change. Now you are talking about ESG investing. I don’t see supply chains mentioned anywhere yet? What am I missing?”
This is what is not always obvious. Climate change is all about supply chains. ESG concerns are entirely about the environmental and social impact that are a consequence of the way the supply chains that enable production, consumption and trade are being managed by the corporations that control them. ESG concerns are also entirely about how humanity governs the operation of global supply chain networks, with large corporations and governments acting as the proxy for every man, woman and child.
Yes, between the climate crisis and the COVID-19 pandemic, supply chains are having a moment. I believe we are on the cusp of a golden age of technology-led innovation in supply chain.
FreightWaves has been at the forefront of reporting on many of these trends: electric vehicles. mobility, logistics technology, artificial intelligence and machine learning, blockchain and distributed ledger technology. The just-ended Global Supply Chain Week also highlighted progress in this area.
In this column I have tried to give you a window into what early-stage venture capitalists like me see emerging at the intersection of supply chain, innovation and technological invention.
On March 23, 2020, FreightWaves ran An open letter to the Supply Chain Caucus of the U.S. House of Representatives, in which Craig Fuller, FreightWaves’ founder and CEO; Lisa Morales-Hellebo, my co-founder at REFASHIOND Ventures; and I called on “leaders and professionals in supply chain, innovation, and technology, whether based in the United States or abroad, to unite in helping the recently formed Supply Chain Caucus of the U.S. House of Representatives as well as leaders in other countries set an agenda for supply chain, innovation and technology that is built to withstand the challenges the world will contend with in the future.”
On Jan. 21, 2020, FreightWaves published Commentary: Davos 2020 is about supply chains, disguised as climate change, in which I argued that “the supply chains on which human civilization has been built must be refashioned. Man-made supply chains are having a severe adverse impact on natural supply chains and ecosystems, and mankind’s current path is unsustainable.”
On March 5, 2020, FreightWaves ran Commentary: Is 2020 the year of supply chain risk?, in which I argued that “2020 marks a watershed moment in how we all think about supply chain risk and how corporate executives think about managing the risks inherent in their supply chain.”
People now want resilient supply chains that do not continue to harm the environment. COVID-19 has forced us all to grapple with how utterly dependent we are on the supply chains that form the foundations on which modern society has been built.
Supply chains are having a moment.
I wish I could predict what this moment will translate to 10, 20, 30 years from now. I can’t do that. But I can continue reporting on what I see happening today among the men and women who are working to define the future of the supply chains that you and I will be reliant upon.
If you are a team working on innovations that you believe have the potential to significantly refashion global supply chains, we’d love to tell your story in FreightWaves. I am easy to reach on LinkedIn and Twitter. Alternatively, you can reach out to any member of the editorial team at FreightWaves at [email protected].
Author’s disclosure: I am not an investor in any early-stage startups mentioned in this article, either personally or through REFASHIOND Ventures. I have no other financial relationship with any entities mentioned in this article.
