Sustainability Still Matters

- Welcome to another episode of Supply Chain Frontiers, the "MIT CTL Podcast" where we explore the trends, technologies, and innovations shaping the future of supply chain management. I'm your host, McKenzie Berry. Today we're discussing the latest research on how companies are thinking about sustainability with results from the annual state of supply chain sustainability survey. Joining me are leading researchers from the MIT Center for Transportation and Logistics, Dr. Josue Velazquez Martinez, director of the Sustainable Supply Chain Lab, and Dr. Sreedevi Rajagopalan, a research scientist in the lab. So glad to have you both on the podcast and I think we're ready to jump right in. Just in terms of setting the stage, Josue for listeners new to this report, what is the state of supply chain sustainability report and why is it important right now?

- Well, first thank you Mackenzie for having us here. Very excited to talk about this fascinating topic of sustainable supply chains. And one of the most important studies we have at the lab is precisely this, the state of supply chain sustainability study that we also call it the report, in which we survey every year, hundreds, sometimes thousands of practitioners, specifically related to the best practices around sustainable supply chains. This goes in different dimensions, environmental, social, also how they are dealing with the specific trends that are happening. When we started the study a few years ago, we were concerned about the pandemic times, whether organizations were still putting sustainability as a priority, and now we are also having interesting times from the economic political landscape. So this study is a way to get a sense what companies are currently facing, what are the challenges they foresee, and we are able to also build interesting insights that will inform other companies that are planning to also enter into this interesting topic of sustainable supply chains.

- So checking the pulse on sustainability, but also giving other companies a roadmap. So the survey's been running for several years. What shifts or surprises have you seen when you compare it year to year?

- Yeah, there are several surprises, but to me two of them stand out. One is in the past what was shown as investors pressure was the highest. Most companies across the globe face the highest level of pressure from investors to focus on sustainability related initiatives and measure their emissions. But this year what we see is while in North America and companies continue to face the highest pressure from investors, but in Europe it is the regulatory pressure that is the highest. That's one interesting insight in this particular survey. The other one is, although the number of firms that have had publicly stated sustainability goals have increased, what we find is some of the firms have quietly retracted or relaxed their timelines. In the past we saw that companies had very tight timelines to achieve their targets, but now they're relaxing it perhaps because of financial and other constraints. However, we still see sustainability still matters because we find that companies that have publicly stated sustainability goals are 74% more likely to invest in high impact sustainability initiatives and also are integrating sustainability related decisions into their day-to-day decision making.

- Could I also just add one more addition to those contributions? We also observed something interesting. We knew that with the new U.S. administration, the leadership the U.S. has for the rest of the world has an effect in way that other organizations start operating. So we were very curious to know whether after the new policy entry in place, which means the withdrawal of the Paris agreement of the U.S. some of the potential drivers and regulations in California were also withdrawn. So how will that affect the way in which companies are prioritizing sustainability initiatives? And that was the first question, how does that affect your own priorities on sustainability? And we found something interesting, I believe it's also one of the main contributions of the study. Approximately 72% of the companies didn't observe any change in their priorities, which also is an argument in favor of the title, like of a report, which is sustainability still matters.

- Yeah, right. Because a lot of industries are very much influenced by regulations, but to see that the commitment to sustainability is still remaining despite rollbacks is significant. So speaking of regulations which you both spoke to, in the U.S. some sustainability regulations are being rolled back. Are companies adjusting their goals and response? Are they staying the course? You spoke to some of those statistics, but any other insights?

- So regulations, as Sreedevi mentioned, play a big role and we know for sure that in Europe it's the major driver as opposed to investors. Yet we have observed that, for instance, I was just mentioning there was the California Act requiring from companies to do a transition to electric vehicles, particularly for all the operations from the drayage, they call it like the first mile from the port to the first warehouse and that was having a big effect. A lot of companies preparing just to do a transition to a different type of energy source implies a completely different supply chain behind it. That means not just defining where charging stations will be, type of equipment, spare parts and workshops, how you will start transitioning the fleet that you currently have and start moving. It is a really a big problem that by the way, it's fascinating because it's more research for our lab.

- Certainly not as easy as flipping a light switch.

- Totally. Any energy source, any other innovation in technology and equipment that is intended to transition the, in this case, transportation activity or any other in general we'll definitely have huge implications in logistics as supply chain management. And that's where we are. We do this because we know that the innovation that this can drive can make things possible. Now what we observe is that many companies were intending to do research around the electrification of the supply chain when this was relaxed or withdrawn entirely. What actually brought this also alternatives to look for other innovations, and that is actually a good thing to happen. So from one side, instead of focusing on only electricity, which again is questionable because while many researchers will argue this is actually the future, at this point the U.S. do not have the energy source to satisfy all the needs for everybody to transition. So you need to look at the grid, you need to look at the way that you are supplying this. But there are other options as well. We have a potential hydrogen source or LNGs or biofuels. So now by relaxing that constraint, some companies are starting to study other alternatives because at the end, the pressure to move to sustainability is not just driven by a particular act or a particular policy. Some of the companies already have understood that sustainability is profitable in the long run. So if you will look at 10 years, 20 years from now, you wanna keep your business there sustainable, but now having alternatives, now we have a way to build a roadmap and then understand how these technologies are gonna evolve, the research around them, the feasibility to implement them. And those things are gonna really make possible a lot of different savings in emissions and reduction of environmental impacts in the future.

- Well that's the tagline. Sustainability is profitable in the long term.

- Adding to that, 80% of the companies we surveyed, said that sustainability is important or very important for their long-term success.

- And most people wouldn't think of sustainability being a conduit for innovation. But that's a really important part of not just the report, but y'all's lab as well.

- Absolutely. Every time that companies face disruptions, which definitely the sustainabilities of not just has disrupted the way or potentially disrupted everything that we are gonna have and operate in the future, but this brings innovative ways to find alternative methods, approaches to solve the problems is really keeping us really busy.

- And certainly the protection of the planet is necessary for all of us long term. But Europe is moving in the opposite direction in terms of regulations with tougher requirements than the U.S. How do those ripple out to companies operating globally?

- European regulations, particularly CSRD, plays a very vital role in pushing companies to have more standardized way of reporting and also more transparent reporting. And companies that operate globally now have started putting pressure on their suppliers to release data to comply with all these regulations. So if companies that operate globally need to have market access, they need to comply with these regulations. So they play a very big role.

- So if they're operating in Europe which has stricter requirements, they may apply those same standards across the entire supply chain.

- Absolutely, I don't think they go by the local standards. Given that they need to operate in these European markets, they don't have a choice but to comply with these regulations. So more and more suppliers are under pressure to release data and also work closely with their corporate buyers to be able to mitigate Scope 3 emissions.

- I'm so glad you mentioned Scope 3 emissions. That's a great segue. So this year the study placed special emphasis on Scope 3 emissions, which capture emissions from the end to end of the supply chain, not just the part that a company is responsible for. So looking at how companies are measuring Scope 3 emissions, the challenges they face and how they're managing these issues all contained in the report. Josue, could you shed some light on the tools companies are using to measure Scope 3 emissions?

- Absolutely. Lemme just make a point here, when we discuss Scope 3, as you said, we refer to the emissions associated with the supply chain with the value change, but specifically those that are not related to the assets that are owned by the company. So if the company owns the assets, we call that Scope 1 emissions, Scope 2, the production of electricity and Scope 3 is everything else in the supply chain. So because you do not own the assets, you don't have the access now to the data, like the data that is generated when you know that for instance, you are a logistics provider, you own the fleet, well you know what is the consumption of energy, fuel or diesel of your vehicles and then you can just use that information to get an estimate of the energy that you require and therefore the emissions.

- Right? So say it's a shoe company for example, most shoe companies would just focus on we already have the materials, we're putting the shoe together. But Scope 3 is looking at where'd you get the raw material from?

- Yes, like all the processing, the upstream from the direction of your company towards the suppliers. So whatever is needed in terms of transportation, extraction, transformation, and also in the other side, in the downstream, which means also all the transportation activities and including also the use of your product and at the end of the cycle. Some companies do not have necessarily the database of all the suppliers they're handling. Now imagine to get also information about the details to estimate emissions associated with what is exactly associated with your company. The challenges here is that there is a need for the use of an adequate methodology to estimate emissions. And there are methods that go from economic base, others that go to activity base, but also the technology and the tools, which is also interesting. Are they using the latest technologies that are basing their analysis on lifecycle assessments or estimation still but comprehensive, or are they using other type of tailored software decision support systems that were designed by them, by consulting companies, or they are coming back to use the spreadsheets. And what we observe is that vast majority of the companies are still relying on spreadsheets.

- Wow.

- We are not surprised. It's like the largest source of software for managing supply chains that we know. But this actually makes it very hard, particularly for those people that are running those analysis. We observe others, right? There is a variety of different technologies, but the issue is both an issue of what are the technologies that companies are using, plus also the methods that are behind it. You can use fancy dashboards, but if at the end you are just basing your calculations in the most aggregate techniques, at the end your values will not be of use to make decisions to take action. And this is more or less something very common that we've seen in companies, majority of them. And we also observe where we have the most potential contribution as a research lab, how we can help companies improve this measurement and translate those measurement into mitigation strategies.

- Seems like a business opportunity for your lab to come up with a Scope 3 tracking tool that works well, perhaps forthcoming some time.

- Research opportunity there I would say.

- This is definitely the holy grail. It is like the issue is that there is no one solution that fits all, because each supply chain has their own specificities. And for us it's one of the efforts we are putting out there, the creation of the tech, the Scope 3 emissions consortium, that we are launching so that companies that are sharing similar challenges, similar suppliers, can actually do a more collective effort to gather better quality of data, define better techniques to estimate emissions, and have also a share of the benefits that this type of collaboration initiatives may actually bring.

- And what does the report reveal about the types of data companies rely on to estimate their Scope 3 emissions? Does it differ between Europe and North America?

- North American firms still rely a lot on industry averages and spend-based methodologies, vis-a-vis. European firms rely to a large extent on supplier data. Now the problem with companies relying on industry averages and spend based data is they're mostly inaccurate because they are focused more on cost than on emissions. And for example, with the spend based methodology, the main problem is suppose you as a supplier invest in sustainability related initiatives and you're able to reduce your emissions and you want to charge a premium for that. As a result, the cost of the product increases. But overall the emissions also will go up if you depend on the spend based method. Now this incentivizes suppliers and the companies to invest in sustainability related initiatives and that's where the problem is.

- Sure, so that's a major point from you all that if companies track Scope 3 then there emissions will increase. So how do you incentivize companies to track them?

- Ha, that's interesting. This is a real problem. The way to do it is to of course standardize that method so that everybody compares apples with apples, but it still remains to be done. There are some efforts around it. Some of the work relates more with the carbon intensity factors, which is also an indicator in terms of the efficiency or productivity that companies have. But I would like also to emphasize what Sreedevi just said with spend based. The use of the spend based, literally uses economic incentives. So you say I have this, let's say 100,000 tons of CO2 that I have released as a company, I have certain, I will say $100 million that I'm generating of revenue per year and then I just divide one by the other and I say, well every kilogram of CO2 that I have is one kilogram of CO2 per $1. So you get that information and that's the one that you use to actually get estimates of how much emissions are associated with a particular activity I have with a supplier. The issue is, again, you have an initiative that requires an increase in cost, is gonna actually show us an increase of emissions even though you are actually reducing them. So going to the activity base requires improving the visibility, the traceability, the tracking of data and those things still remain a challenge. We believe now that with the growth of technologies, particularly AI and machine learning, might actually improve the way in which we can work with imperfect information. Now that there is much more that we can browse and compare and speed actually get information faster, we are definitely dedicating a group of research assistants developing methods around these techniques to improve the way in which companies can improve the accuracy of the measurement in emissions with the lack of data that we are facing.

- So Scope 3 needs to become the standard across the industry for everyone to go by. You both spoke to the difficulty of tracking these emissions. Can you go into a bit more detail about why it's so difficult to track them? What specific challenges are companies running into?

- Yeah, sure. 70% of the respondents said lack of supplier data is the main challenge. That's partly because supply chains are global. Most companies do not have visibility beyond their immediate tier one suppliers, right? So lack of visibility is another issue and plus lack of incentives, right? Most of these suppliers are also small and medium businesses. They do not have the resources to be able to measure their own emissions. So companies need to invest in their suppliers. Now a single business, it would be difficult for a single business or a single company to invest in all their supplies. So that's one of the challenges. Other challenges are lack of standardized methodologies as Dr. Josue pointed out. The third is high software tool costs. If you want to effectively measure and track your emissions, you cannot use spreadsheets, you need to have specified tools for that. What companies say that the cost of these tools are so high that we will not be able to invest in that?

- So the report suggests that industry collaborations can help strengthen supplier engagement. Can you share an example of how these approaches are moving the needle on Scope 3 measurement or reduction? Just to give the people a bit of a roadmap or an example to follow.

- Some of the efforts that we've seen already in practice and this being already for a few years is for instance the GLEC framework. So GLEC is an initiative in which companies decided to standardize the challenges around estimation of transportation of CO2 emissions and PASS actually developed at that time by one of the researchers here at MIT, Suzanne Greene, and they said there is a manual to how to estimate those emissions. Now imagine that you are in a time in which companies are having a collection of different methods, meaning methods based on the greenhouse gas protocol, smart way, NTM in Europe. So you were having a variety of techniques and all of them with certain assumptions, certain mission factors. So the approach of the collect brought all of this together, leveraging also the relationship with smart freight. And at the end companies are starting to share the same challenges and also the same innovations to improve their quality of their measurements. Now this is something that is happening in transportation, but the main issue is that there are many other categories that are related to Scope 3 emissions that still require a lot. And one of the Scope 3 emissions are classified in 15 categories as per the greenhouse gas protocol. One of the biggest challenges is category one, which is purchase goods and services, that refers to where those products are actually coming from as you were describing, where is the extraction, where is transportation? So for that particular challenge, it's key to build relationships among suppliers. Now she Devi already highlighted something interesting. Imagine that you're a micro or a small firm that is second tier of supplier or maybe the first tier of the suppliers and now you are serving, I don't know, 15 different companies. I mean big companies and the 15 are sending you a different survey so that you respond questions related to carbon emissions. And again, you first have no idea what is this carbon emissions associated with your operations. You don't have time for that, because you probably are still working to make a living with all the challenges that are happening. And then third now I need to do it for 15 different companies. So some of the things that we are proposing is the creation of industry cross collaboration via consortiums. And if we are having to do a strategy to outreach these companies, why don't we just work together, define what will be really a collective effort with smart questions or technologies to track data, create incentives and do research around it, so that by just going in one particular effort, you can actually tackle a lot of these issues with visibility and traceability. And one of the examples I would like to emphasize is precisely the one that I mentioned earlier, the stack, the creation of the MIT Scope 3 emissions consortium. So we are launching this effort with the intention to help companies develop these technologies, these innovations, and share also best practices in a forum in which we can define a research agenda that can actually shape the future of Scope 3 and build standards that can actually help also not just the companies to do it, but also even the government to better regulate. I must say that one of the key strategic partners we have in this consortium is actually the CDP, formerly known as the Carbon Disclosure Project. CDP is this organization that has built a platform in which companies among many other things can go and disclose their carbon emissions. And you'll be surprised, I can assure you that almost any company, even the ones that you are thinking at this moment are actually disclosing their emissions there. The issues they face is how to help companies disclosing emissions in Scope 3 if at this point they don't have good metrics. So this is where we are helping and we are partnering with them to also provide insights and methods that can help them also improve their methodologies and their approach to outreach these companies.

- Adding to what Dr. Josue said, the survey points out that very few companies actually participate in industry collaborations, but those that actually involve in these industry collaborations actually see a benefit. 79% of the firms that have industry collaborations say that they have experienced better supply engagement, better shared resources as a result of which the cost to estimate their emissions have gone down. So there are definitely a lot of benefit that companies are having if they involve in industrial collaborations.

- Which is a great point because counterintuitive to business standards where you're in competition with each other, the collaboration actually benefits everyone business wise and sustainability wise too. So trying to go against the curve there and change the narrative around collaboration versus a kind of competition. Next we're gonna talk about transportation, but before we do, speaking of surveys, this episode of Supply Chain Frontiers is brought to you by the annual MIT omnichannel supply chain survey. If you work in the e-commerce or retail industry, you can help shape its future. We invite you to respond to the brief survey @omnichannel.mit.edu by October 30th, 2025. Pivoting now to one of the main topics that you all cover in the report, which is transportation, the freight sector is a massive source of supply chain emissions as you talked about Josue, the report dives into biofuels, battery, electric and hydrogen. What are companies actually doing right now and which technologies look most promising in the next few years?

- So the study shows that companies rely at least their trust more in the biofuels as the one that seems to potentially bring short term benefits. And we know also that EVs is a big thing, but at least in the qualitative interviews we've noticed that there is a little bit of a disappointment around it as well, because it's not that simple as it was said before, yet it still seems very promising. And again, when we discuss these technologies, all of them have always the same issues. We need to conduct a comprehensive life cycle assessment to formally say which one is actually better or more environmentally friendly than another. The issues is that these things are ongoing research, right? Like the sources in which you can build these batteries for electric vehicles or the hydrogen which there is now like green hydrogen or even the biofuels, which also still requires the crops and the growing. So all those things have always some trade offs. And the interesting part is that different centers from the U.S. and also from Europe and also other parts of the world are really conducting cutting edge research to make it work any of these technologies. So which one is the one that seems more promising? It's hard to tell at this point. I believe with the important thing is companies should be in this moment investing on understanding this roadmap of transition, how the technologies are moving, what are those that have more or less prospects and start trying to build the small pilots to learn how this technologies will in fact become the affordable option or the most promising option. How would you need to redesign your supply chain and operations to actually implement these technologies? Some of the things that we've seen particularly in freight is that most of companies are just waiting to see what's gonna happen and that's very risky move. It's like if I'm a shipper, I'm trying to push the carrier to start providing some green deliveries and the carrier said, well okay, if I do it now it's more expensive, would you be willing to pay a premium fee? And they say, no, no, we don't wanna pay for that. And then both start having the elephant in the room who is actually going to pay for it. But in the meantime, everybody waits to see which technology becomes affordable to invest. And in the meantime there is so much that we can really do with the current infrastructure. If you have already a fuel diesel based fleet revisiting the models and the operations that you usually do as a company to aim for a minimization of cost or mileage or simply just increasing service level may actually just by looking at this with different eyes and pay attention to what is the effect that this has in the missions associated with your operations. We have already discovered options that can decrease the emissions and by far also decrease the cost, which as you know, fuel consumption is one of the main components in the transport cost. It's interesting that biofuel seems for the company something that looks promising at this point, but to tell you the truth, it's a little bit too soon to tell, we need to continue doing research and hopefully in the next study next year we will know a little bit more about it.

- One of the interesting findings for me was the findings around electric versus hydrogen. 'Cause in the mainstream I think we hear a lot about electric, but I wouldn't have known that hydrogen was a contender. Can you lay out that relationship or speak a little bit to hydrogen specifically?

- Well, hydrogen is been there already for a few years, mostly coming from interesting research center in Germany a few years ago. Were the ones arguing also that hydrogen might be the strong alternative because one of the benefits on this one is the resulted energy. This seems to be powerful for the freight and increasing the range, usually freight, we have already solved a little bit the issue of the last mile, if you are really in domestic deliveries within a city, or urban areas, the ranges in which you need to travel in terms of miles are so small that the electrification of the fleet seems really an option. It's been there already for I would say more than 10 years. The issues come when you try to move into city, even if it's domestic in the U.S. because domestic in the U.S. can go up to 300 miles or even 1000 miles, so you can live in the states. In Europe, this is between also already countries. But moving like that with one particular energy source like electricity is a big issue because again, you don't have sufficient range. You need to stop, you need to charge and all those things are the problem. Now some of the arguments is that hydrogen may actually provide more power on this. So hydrogen is definitely an interesting and powerful option. It shows also that the benefits in terms of building a network in transportation that can actually operate inter cities with ranges that go above 150 to 200 miles, which is the main challenge that now electric vehicles are facing. It might be possible with the energy coming from hydrogen. The issue with hydrogen is the production of hydrogen and the production at this point, if we still are using similar sources, it's gonna just result in what we call the water bed effect. You get a reduction here, but you are actually having an increase in the production which overall is actually having higher pollution.

- Which again is the benefit of Scope 3 emissions, getting to see the whole picture.

- Getting to see the whole picture, we need to understand the supply of this energy as well. And in electricity you have the same issue. You're still using fossil fuels mostly in most of the world. I believe last time I checked it was like 68% of electricity still comes from fossil fuels, but you have still other options that are now operational, meaning also solar panels or hydro or many others. But the issue here is understanding these trade offs. Now hydrogen is now developing new research that goes to also the use of alternate energy sources to make it green, like make it neutral or net zero. And if that happens hydrogen definitely becomes a feasible option. Yet at this point we don't have that technology operational that will work with the magnitude of need that we have in transportation. You said it, transportation is not just the largest source of emissions in the U.S., in the world is one of the largest. But one of the main things for us is that for the last decade is the largest source of growth of emissions. So if you compare, it always grows the most and that's why we need to do something about it.

- It sounds like hydrogen would be most beneficial for long haul trucking, electric for more short term, but it really depends on the production. We have to take that into account in terms of energy sources. Sreedevi, what do you see as the biggest barrier supply chain leaders face when implementing new freight technologies? Do those barriers look different in Europe compared to North America?

- Definitely it's very different in terms of the barriers. North American firms point out that there is lack of regulatory incentives and there is a wider resistance in the industry to change, which is not very surprising given the level of fragmentation we have in North America in the freight transportation sector. And Europe, on the other hand points to high upfront costs of implementing new technology. And that's the difference that we see between North America and European firms.

- In terms of recommendations that you all would make based on your research, your work and findings in the report for each of you, if you had to make a recommendation for business leaders who are listening, what's one action they can take to move from talking about sustainability to actually making an impact?

- I think it's impossible for a single company to be able to effectively measure and track and mitigate their Scope 3 emissions. It's important they collaborate across industries, they form coalitions and jointly work with their suppliers and implement several decarbonization levels and there is no one size fit all approach. It's important that companies use a portfolio of approaches to be able to effectively manage their Scope 3 emissions.

- We'll say you Josue.

- I will say a few things. First, the study or report reveals this is still a big challenge. This is still in the priorities. We know that there is a challenge also in the resources and the investment. We understand the difference in the drivers in organizations that are based in the U.S. or in Europe or other parts of the world. And at the same time, as Sreedevi mentioned, Scope 3 emissions remains probably the biggest challenge that we have at this point for companies to accomplish their climate pledges. What we see is the opportunity to do two things, from one side, focus on the current situation and that means, before going to the investment of equipment, start making also investment on looking at the way your company and your supply chain is operating the current infrastructure they possess, the current assets they have. A lot of different things that we have discovered in the past years are coming from quick wins of companies using new data that they didn't have before, information related to carbon emissions and other environmental impacts. And by looking at this, improving the quality of the metrics and associating these metrics with activities that are related to the business, companies are already finding quick wins. And that's something that I will definitely encourage. Of course there is the other side of the investment of equipment. In that side, I will recommend companies to just pay attention to the new developments, look at the latest research, the challenges and opportunities that are usually discussed in the advancement of the hydrogen, of the EVs, of the biofuels, of the LNGs and many others that are there. Companies are really looking at this, at least those that are showing some results already are there to run pilots proof of concepts, building the muscle, the capability, so that when the time comes to make a transition, they're better prepared. So I will strongly recommend this too. The bottom line of this is you get what you measure and understanding that the quality of the indicators that measure your emissions and your greenhouse inventory, are gonna drive entirely the actions that companies can actually do. If you use an aggregate method like spend base very little, you're gonna be able to do in Scope 3 emissions. If you are using steel indicators of in transportation, reduction of mileage as the main driver of reduction of emissions, you're gonna miss opportunities of building different type of networks and routes. So paying attention to the metrics, looking at the latest, the most detailed approaches that will allow the company to make decisions is the first step. And lemme just remind you, this is like the simulation models, the tagline, garbage in, garbage out. So you better pay attention that you put highest quality to actually get the highest innovation and highest impact.

- And that applies to many things in life.

- Absolutely.

- So beyond the report, what are some of the initiatives that the sustainable supply chain lab is undertaking right now? What are your priorities? 'Cause as I understand it, the report is a big part of what you do, but also a small part of what you do 'cause you have so much going on.

- This report serves as a guide for us to focus on research that is relevant. And that's why also all the things related to Scope 3 emissions are part of the agenda for us. The creation of this consortium, discussion also with suppliers, the partnership with the CDP and working on methodologies based on AI and machine learning to improve the quality. All those things are part of the research agenda we are focusing on. And we have also other problems that we are working. We have topics that are a little bit outside the sustainability report, include also the missions associated with food waste. Well food waste is we have a lab at CTL, managed by Chris Mejia.

- Yes, our last episode on the emerging market economies lab.

- Yes, so Chris does a lot of this very fascinating work around the topic of food supply chains. What we are doing is looking at this particular topic from the perspective of environmental impacts and carbon emissions. And what we've seen is that of course the magnitude of food waste is huge, but imagine all the energy that was required to manufacture those goods. We are working also with problems related to dieticians. When you work with dieticians and they actually recommend certain diets, are they diets environmentally friendly or not?

- Well that's a beautiful thing that you're revealing too because something that's really foundational to the lab is that you all's work is relevant for every single supply chain. So it's a huge range that you're able to work with. What about for you Sreedevi, beyond the report, some of the initiatives the labs undertaking?

- Yeah, so it's still at a very early stage we were in the process of forming a sustainable transportation consortium of shippers, brokers and carriers, because each of these players in the supply chain have their own challenges in mitigating their own emissions. While shippers focus primarily on Scope 3 emissions, the carriers primarily focus on Scope 1 and Scope 2, but their Scope 1 and Scope 2 is the Scope 3 for the shippers. So we thought it'll be a good idea for these three players to come together and have research agenda that everybody gets benefited. The other thing is some of the social sustainability. So we just not only focus on environmental sustainability, but also on social sustainability. And one of the projects that we are working on is on curbing malnutrition and developing countries wherein if you look at consumers particularly in the bottom of the pyramid, a lot of their choices are largely driven by affordability, availability, and accessibility. And you see, you walk into any grocery store, a lot of unhealthy items are mostly visible and near the aisle or closer to the checkout. So we wanna understand if raising awareness about healthy and unhealthy products and then giving some incentives to the shopkeepers to stock more healthy products who have an bearing on the choices the shopper make from the bottom of the pyramid. So that's one of the projects that we are working in Latin America. The other project is we wanna understand if people who consume alcohol, if there is a non-alcoholic version of that particular product, which gives you the same taste and same appeal and things like that, would they switch to a non-alcoholic version of that particular product? So we are trying to understand what are consumer preferences? How much does the role of a mother brand play in people's choice of switching from an alcoholic to a non-alcoholic beverage?

- And what are the sustainability implications of alcoholic versus non-alcoholic?

- Yeah, the sustainability implications, of course it's social, right? You know that a lot of people who consume alcohol, they really find it hard to quit. But then if there is a non-alcoholic version, maybe it could be helpful for them.

- Is there anything that you all wanna make sure to mention from the report?

- Once kudos to our partner, which is the Council of Supply Chain Management Professionals, which is our partner that has contributed with us to run the study since the inception. And also kudos to CH Robinson, great partner who has kindly sponsor the study this year. I would like to also mention that we are relaunching the SCM.290x core, sustainable supply chain management in edX. So hopefully people will be excited to join. We will be discussing a latest research that we have developed and also having interesting discussion forums with experts and practitioners that have kindly accepted the role of community teaching assistant.

- That wraps up this episode of Supply Chain Frontiers. A big thank you to Josue and Sreedevi, for sharing their expertise and insights into the current state of sustainability. To learn more about the lab, visit sustainable.mit.edu. Supply Chain Frontiers is recorded on the MIT campus in Cambridge, Massachusetts. Our sound editors are Dave Lishansky and Danielle Simpson, at David Benjamin Sound. And our audio engineer today is Kurt Schneider of MIT Audio Visual Services. Our producer is myself, Mackenzie Berry. Be sure to check out previous episodes of Supply Chain Frontiers at ctl.mit.edu/podcast or search for us on your preferred podcast platform. If you enjoyed this episode, please subscribe. I'm Mackenzie Berry. Thanks for listening and we'll catch you next time on Supply Chain Frontiers.