Reverse logistics presents itself as an advantageous strategy for companies seeking to improve their image among engaged consumers
Reverse logistics is a concept that refers to the process of planning, implementing and controlling the flow of products, materials and information, which go from the point of consumption back to the point of origin or recycling. This practice aims to meet environmental and economic requirements, aiming to reduce environmental impact, save resources and, in some cases, create new sustainable business opportunities.
In an uncomplicated way, reverse logistics is nothing more than making products return in the supply chain, that is, instead of a good being made, used and discarded, it is returned and recycled.
Actions of this type involve several activities, such as collecting used products, recovering recyclable materials, properly disposing of hazardous waste, reconditioning products for reuse, redistributing returned products and many others. Therefore, it is fundamental to environmental sustainability, as it contributes to reducing pollution, conserving natural resources and reducing waste.
Companies
It can be an advantageous strategy for companies that have environmental preservation in their culture or seek to improve their image among consumers concerned about the environment and also reduce operational costs, through the recovery of materials and the reuse of products.
Since 2006, the World Economic Forum has published annual reports forecasting the main risks that could impact business. In 2023, the published document presented a Top 10 with the most serious risks in the short term, eight of which are related to climate change and social crises, explain Beatriz Busti and Flvia Galdiano Fonsatti, sustainability consultants at Protiviti.
The consultants say that the report also included the ten main risks for the long term. In the same vein, the first four are related to changes in climate, the increase in natural disasters and extreme events and loss of biodiversity. This type of prediction is present in the last five reports, reinforcing every year the need to review the way humanity interacts with the environment.
With this need to change the way consumers and companies deal with waste in the environment, investment in reverse logistics has become a commitment for brands.
ESG
Reverse logistics also has a direct relationship with ESG criteria, which refer to environmental, social and governance factors used to evaluate a company’s performance in terms of sustainability and corporate responsibility.
For environmental factors, reverse logistics focuses on reducing environmental impact through recycling, reuse and proper waste management. By implementing reverse logistics practices, companies can reduce the extraction of natural resources, reduce the amount of waste sent to landfills, and reduce carbon emissions associated with the production of
new products.
For social factors, it can create jobs in collecting, disassembling, recycling and repairing products, contributing to economic development and social inclusion. Furthermore, companies that promote reverse logistics demonstrate concern for the well-being of consumers.
As for the governmental factor, it is related to the way a company is managed and how decisions are made. Successful implementation of reverse logistics requires a structured and efficient approach to supply chain and operations management. This reflects good governance, as companies need to define policies, processes and metrics to ensure that reverse logistics is effective and aligned with the company’s sustainability objectives.
In this scenario, sustainability has become a more active topic at the boardroom table and senior management, so that the set of actions involving ESG has become part of the strategy of companies around the world, add Beatriz and Flvia.
For them, although at first glance it may seem that this entire ESG topic is limited to the scope of large corporations, the reality is that medium and small companies are important players in the transition to a more sustainable scenario.
To do so, such companies need to let go of the belief that investing in ESG management only means increased expenses, and understand that such a strategy is capable of generating cost and risk reduction, as well as making them more attractive. By focusing on the environmental, social and governance pillars, medium and small companies strengthen their brands and increase trust among this public, the consultants point out.
In summary, investing in reverse logistics not only demonstrates environmental responsibility, but can also result in economic benefits, improvements in brand image and meeting customer expectations. a strategy that can contribute to the long-term success of companies, while promoting sustainable practices.
Challenges
Implementing sustainable logistics actions and ESG practices can be challenging for brands in several ways. Starting with the high initial costs, already mentioned above. Establishing an efficient reverse logistics system, for example, can be expensive. This includes creating the infrastructure to collect, sort and process returned or discarded products properly.
The complexity of the activities also appears as a challenge, the implementation of reverse logistics, recycling and product reuse systems can be complex and require changes to existing operational processes. Companies often also rely on external suppliers and partners to implement sustainable practices throughout the supply chain. Coordinating these actions and ensuring that everyone involved is committed to the same principles can be complicated.
Julia Ades, founder and head of research and content at Apoema, highlights that educating consumers is one of the biggest challenges. Many people look for brands that talk about sustainability and offer sustainable attributes, but, when we break it down, we see that environmental and sustainable awareness is still, for many, quite superficial. There is no integrated understanding on this topic, she says.
For her, educating consumers is a challenge and an opportunity, since people are very curious and interested in learning about sustainability in practice and what its real impacts are.
Read the full story in the October 2, 2023 edition
