Dubai companies show lukewarm response to 'green' supply chain

Dubai: Companies in Dubai largely ignore 'green' supply chain practices because of a lack of awareness, according to a survey conducted by the Dubai Chamber of Commerce and Industry's Centre for Responsible Business.

The survey found that only 38 per cent of the 800 respondents were considering implementing green supply chain practices.

Those in favour were largely doing so to meet customer's needs.

Fifty-one per cent indicated they were doing so to comply with existing laws, 42 per cent to comply with their headquarter policies and 35 per cent said it was to reduce the influence of competitors.

According to Angela Mulgrew, regional environment manager at Hyde Consulting, 38 per cent was an encouraging figure since the green supply chain is a relatively new concept globally.

"The fact that a survey like this has been undertaken is enormously encouraging and indicates how far the UAE has come in the past couple of years.

"Businesses are beginning to understand that wider corporate responsibilities relating to sustainable development will not necessarily increase their bottom line, but can improve brand and customer satisfaction while also reducing their exposure to regulatory risks," she said.

Notably, the study found that ignorance regarding the green supply chain was the main obstacle to companies implementing the practices.

Developing and maintaining a green supply chain requires a company to not only look at the costs, but also at the environmental and social impact of their suppliers, products and services.

Some companies have thousands of suppliers and sub-suppliers. This requires commitment to incorporating green supply management into normal procurement processes.

"This may require a different way of working and companies would benefit from a forum to share information, best practices and raising awareness of their specific problems," Mulgrew said,

She added that supply chain reporting will become widespread in the UAE as companies realise its significance in being competitive and transparent to their stakeholders in order to attract foreign investment.

Progress

The study also found that 62 per cent of the respondents implemented selling used materials, recycling and packaging as the company's green initiative. Forty-two per cent of the companies said they factored green supply chain concerns as part of their decision making.

"Many other practices are deemed important and cited by many companies such as the 'eco' design of products [43 per cent], purchasing less polluting materials and products [34 per cent], reprocessing of waste [28 per cent]," the chamber said.

Most companies (86 per cent) said the government ought to play a role and set an example by implementing the green supply chain and providing them with incentives to help adopt the practices.

Strategic partnerships

The study recommended that businesses should operate in a socially responsible manner, with suppliers as strategic partners.

Mulgrew said a big obstacle to greening the supply chain was being able to access local green suppliers and products.

"A central database of these suppliers and their credentials would enable companies to make more informed decisions about their suppliers.

"Dubai already has an environmental legal framework and suppliers need to realise that scrutiny of their environmental compliance and an understanding of their impacts is a reality if they are to compete in the international arena," she said.