The need for increased sustainability measures can no longer be ignored, and businesses in the Technology Channel are no exception. The industry is growing at pace, and new initiatives are being introduced to offset carbon emissions regularly in line with net zero goals. One of those measures is a ‘Globalocal’ way of working, which translates to using local supply chains at a global level.
Following the recent COP27 conference, more and more businesses are taking steps to increase their sustainability measures. As reported in Agilitas’ latest Technology Channel Confidence Index, confidence to act with impact and create a better, more sustainable future over the next 12 months scored 7.8 out of a possible 10 amongst UK industry decision-makers.
A Globalocal approach allows companies in the Channel to focus on building strong and resilient supply chains, whilst also considering their carbon footprint and innovative new ways for them and their partners to monitor Scope 1, 2, and 3 emissions.
Defining a Globalocal Approach
In simple terms, a Globalocal approach involves adapting local supply chains to benefit an organisation on a global scale. By creating these local supply chains, Channel businesses are better able to adapt quickly to market pressures and mitigate the issues the industry has faced regarding global supply chains.
An example of this made headlines recently, with HSBC ending its funding of new oil and gas-related projects as part of its efforts to drive down global greenhouse gas emissions. Following advice from international energy experts, the move sends a strong message to fossil fuel giants that investment is waning and also shows that investors are demanding a more sustainable Globalocal supply chain in their portfolios due to financial governance across the banking sector.
Globalocal, a term we coined here at Agilitas, is all about building local supply chains and ecosystems across global markets and centres around a more consumer-centric model. Over recent years, after unprecedented events like COVID-19 and the Suez Canal blockage, the need for stronger, local supply chains has significantly increased. Having a supply chain that is resilient, can adapt to external issues, and can innovate with the organisation is more essential than ever.
One of the main and most important elements of a Globalocal approach is that it is ‘partner-led’. Forming relationships with partners on a local scale and fostering an ecosystem between all parties helps to bolster a collaborative and innovative business approach. This can also be achieved by exchanging and implementing ESG best practices with those who share the same values and end goals.
Creating a Resilient Supply Chain
It is apparent now more than ever that there is a need for businesses in the Technology Channel to build strong and reliable local supply chains.
Earlier this year, the NatWest Sustainable Business Tracker survey recorded that 46% of SMEs have already changed at least one international supplier contract to one within the UK. A further 20% plan to make this change within 12 months in order to combat disruptions, build resilience and support the local domestic economy. NatWest also estimates that within five years, 75% of UK SMEs will be using more local suppliers than they were pre-pandemic.
Creating strong local supply chains still means a global network of engineers, but as an added benefit, reduces the global carbon footprint of organisations and utilises local knowledge, such as regional supply networks and cultural expectations. And with around 90% of emissions coming from the supply chain, this dynamic can also support a profit-with-purpose ideology and push organisations in the right direction for both sustainability and ESG goals.
The Future of Globalocal
Increasing expectations are a main driver for Channel businesses who are enhancing their sustainability initiatives and focusing their efforts on a circular economy approach. Now we have experienced this disruption firsthand, it’s time for organisations to step up and work their way towards mitigating scope 3 emissions in line with 2030 targets.
Reducing scope 3 emissions is becoming more urgent amongst those within the Technology Channel, and it’s apparent that it’s a concern for consumers who are becoming increasingly eco-conscious. A Globalocal approach is effective in decreasing these emissions and creating a collaborative environment where partners can share best practices and collaborate on their ESG goals.
An industry-wide effort is needed to push the Channel towards a better, greener and more sustainable future, and the impact of global supply chains is something that can no longer be ignored. We have already discussed the impact this is having on the finance sector, but it is now becoming increasingly common for organisations to withdraw from partnerships if they don’t share the same vision. An example of this is the announcement that the head of Canada’s $400 billion pension fund, CPP Investments is willing to cut ties with firms that aren’t committed to their net-zero targets.
In the months ahead, we will no doubt see even more movement amongst Technology Channel businesses to redefine their purpose and how they want to be valued, introducing a new era of eco-focused channel partnerships built on shared views for improved sustainability. Purpose and profit can work hand in hand and by striking a balance so that neither has to be compromised, organisations can continue to evolve and see beyond the now and into 2023 and beyond.
