Supply Chain Managers Must Become Climate Change Leaders

Supply chains impact global warming and they need to improve


Climate change denial has plagued the planet for decades, flying in the face of overwhelming scientific evidence. Fossil fuel interests, their lobbyists, and the politicians who listen to them and take their money in campaign funds are well practised in obfuscating the issue for the public, convincing them that it is actually the climate change lobby who have a vested interest, propagating the myth of our self-inflicted doom for research grants and wind farm money.

NASA now makes very easy-to-understand videos showing polar ice caps decreasing in the Arctic Circle, which is demonstrably heating up at twice the speed as the rest of the world. One 2013 paper found that ‘since 1975 there has been a substantial and observable regional and global increase in the proportion of Category 4–5 hurricanes of 25–30 percent per °C of anthropogenic global warming.’ So there really is no excuse.

Supply chain leaders, in particular, need to be especially vigilant, as what they do can have such a profound impact on global warming. This is something that most have realized. In a survey released last year by SCM World, 54% of 1,018 supply chain professionals who responded said they believed their supply chains played a ‘substantial role in ensuring long-term environmental sustainability.’ Almost all of the rest said supply chains played a ‘limited but meaningful role’ in tackling sustainability, and just 3% said it had no impact.

The threat posed by the supply chain comes largely through emissions from transporting products throughout the chain, packaging, raw material extraction, and the mechanical, chemical or thermal conversion in manufacturing processes.

Supply chain managers must become climate change leaders in their organization. They need to implement wide-reaching change to ensure an organizational culture that embraces clean energy and other climate solutions. In order to achieve this, there are several policies they can put in place.

One is providing supply chain partners with questionnaires around their carbon emissions. This is a tactic employed by 75% of FTSE100 companies, who, according to sustainability consultancy Carbon Clear, either provide a questionnaire about carbon emissions for their suppliers or consider carbon emissions as part of their procurement policy.

Another way of helping this process is putting targets in place and clearly communicating them down the chain. Whether these targets are being met must be regularly reported by all members of the chain in order to maintain motivation. Tackling carbon emissions requires an holistic approach, and a carefully considered plan that is put in place throughout the chain.

One company making a real effort is Timberland. They have unveiled a raft of environmental goals they’re aiming to achieve by 2020. These include a commitment to sourcing 50% of energy used in its facilities from renewable sources, for 100% of their footwear products to include some recycled, organic, or renewable material, and their clothing to be made using 100% organic material. Their 2015 sustainability report showed that they are close to achieving many of these - 84% of their footwear included at least one material containing recycled, organic or renewable content, up from 72% in 2014, while 98% of Timberland footwear was PVC-free in 2015.

Others have been equally driven when it comes to meeting their goals. Unilever, for example, has committed to a complete elimination of non-hazardous waste to landfill, while Coca Cola has pledged 100% water replenishment in bottling operations.

These are all admirable targets, but it’s clear organizations need to go further and it is still an issue many are either underestimating or outright denying exists. But it’s not just the planet that will benefit. According to Accenture, nearly 40% of members of the UK-based Carbon Disclosure Project supply chain program have reported financial savings as a result of their emissions reduction activities, while over a third have benefited from new revenue streams or from savings gained from their suppliers’ carbon reduction activities.’ Bloomberg, meanwhile, found that, ‘stocks of companies that take climate change seriously beat the wider market by almost 10%’. Furthermore, the 187 companies rated by the non-profit Carbon Disclosure Project’s as on the ’A List’ when it comes to fight climate change, saw their stock prices outperform the Bloomberg World Index by 9.6% between 2010-14. And all of this is before you’ve even got to the good PR that comes as a result of being able to say that your supply chain in sustainable. Besides, if the whole world floods, shipping costs will soar. And nobody wants to pay higher shipping costs.

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