Global supply chains enable local companies to make use of global resources and international markets. However, they can also create significant carbon emissions, damage the environment and limit our ability to reach Net Zero.
Supply chains can account for 80% of a company’s total emissions* and having poor supply chains can also hit procurement costs and damage public perception.
Improving the sustainability of your supply chain will not only reduce your negative environmental impacts, but should come with added benefits including:
- potential costs savings in energy costs,
- improved security of supply,
- support for your business to become a more sustainable brand.
Plus, you will be well-placed should tighter regulations emerge in the coming years.
Five steps to a greener supply chain:
1. Map your value chain
The first step for greening your supply chain is to recognize that you are a part of it! Whether you are a manufacturer, distributor or an end supplier, your resources, processes, buildings, and equipment will be contributing to your own carbon footprint as well as those of your customers and suppliers as part of their Scope 3 emissions.
As a reminder, Scope 3 emissions those you are indirectly responsible for up and down your value chain. Anything you do in-house to improve your own efficiencies and reduce your emissions will greatly help your upstream and downstream product flows.
2. Engage Your Suppliers
Next, examine your entire supply chain, including your suppliers, customers, and the products you buy and sell. Can your suppliers make improvements to their products and processes, or their buildings and equipment, to reduce the environmental impacts of their goods and services? Or can you work with more sustainable suppliers, sourcing more locally, using less packaging, looking for the sustainable option?
Gathering data on greenhouse gas emissions from your suppliers may be difficult, but the WWF’s supplier questionnaire can help start the process off. You can also encourage your suppliers and customers in their aim to Net Zero by having sustainability meetings/forums to share best practice. Perhaps you can encourage them to gain the Carbon Charter or another form of environmental certification?
3. Improve Your Transportation Systems
Transport is clearly a major part of the supply chain and creates 7% of global emissions* as well as significant costs, so using haulage and delivery vehicles that use less (or ideally zero) fossil fuels will make a big impact on your Scope 3 emissions and potentially your finances. Some options include:
- Use route planning techniques, cluster deliveries and consider telematics
- Offer your staff fuel-efficient driving training
- Travel with a full load and consider 3D truck-loading software
- For return journeys, backhaul your waste or provide haulage services to another company
- Improve efficiency with AdBlue for diesel vehicles or by making aerodynamic vehicle improvements
- Invest in electric or hydrogen fuel cell vehicles
4. Get Circular!
Often products have a linear journey from resource extraction, production, distribution, and then ending up as waste. However a circular supply chain will either recycle the products or reuse them, for example sending them back to the manufacturer. This adds another link to the supply chain to connect the beginning and the end, thus making it circular. A diversified supply chain can also provide resilience in times of delay or market turbulence.
5. Make a Net Zero Carbon Commitment
The term ‘Net Zero Carbon’ means cutting greenhouse gas emissions to as close to zero as possible, with the remaining emissions re-absorbed from the atmosphere (i.e. through tree planting or carbon sequestration). By calculating your carbon footprint and developing a carbon reduction policy and an action plan, you can take big steps towards reducing your emissions. This will then enable you to choose an end date where you aim for your business to be Net Zero. And by encouraging your suppliers and customers to do the same, you can help create a Net Zero supply chain.
And finally …!
Why not think about how you can improve sustainability and bring your staff on the journey?
- Set up projects that can increase biodiversity and access to nature
- Volunteering such as litter picking can help staff engage with their local environment
- Taking your staff on trips to meet local suppliers, or inviting your suppliers to see what you have done, can help share best practice
Don’t just focus on carbon emissions, by acting more broadly we will have a healthier society, better finances, and a cleaner planet.
* Starting at the Source: Sustainability in Supply Chains: McKinsey 2016
** The Carbon Footprint of Global Trade: OECD/ITF 2015
by Richard Jenner, Sustainability Consultant Groundwork East October 2022
