More and more, companies are dedicating themselves to sustainability. According to a 2019 Business for Social Responsibility (BSR) survey, 52% of companies surveyed cited climate change as a “very significant” sustainability focus. However taking control of your supply chain can be difficult, the BSR survey also revealed, the self-reported integration of sustainability practices has only increased by 1% since 2016.
One way companies can reduce their carbon footprint is to decrease the carbon output of their supply chains. In order to do so, companies need to consider all stages of their supply chain and employ creative approaches to sustainability.
‘Going green’ on a personal level is quite straightforward: recycling, reducing waste and buying sustainable goods are common environmentally-friendly practices. However, on a business level, it can be challenging to know where to start. Here are some tips on how to reduce the carbon footprint and take control of your supply chain.
Increase efficiency and reduce waste
Reducing waste should be a priority for anyone looking to reduce their carbon footprint, but this is even more true for businesses, especially manufacturers.
The main way to reduce waste through taking control of your supply chain is to see where your processes can be more efficient. Are there any processes that can be combined or streamlined? Are there materials or equipment that can be used for multiple purposes?
To address waste, start with a clear understanding of the materials being sent to landfills or recycling centres. Ask yourself a range of questions, including where the waste came from in the supply chain, how it was transported, its volume and composition, and the processes that created it. You can then work backwards through the supply chain to identify areas where changes can be made to mitigate waste.
Reuse and recycle resources
Businesses that make a commitment to recycling can affect change on a much larger scale. Seeing how you can reuse or recycle resources that you would otherwise throw away or replace will make a huge difference to your carbon footprint, and it will also save you money by reducing your overall spend.
One example of something businesses could recycle or reuse to be more sustainable is paper. Many offices generate a large amount of paper waste, which can be recycled instead of being sent to a landfill. By implementing a paper recycling program, businesses can divert this waste from landfill and reduce their environmental impact.
Ensure transparency and communication between partners
Everyone needs to be on the same page to create a more environmentally-friendly business model. When your business embarks on a new green initiative, everyone who can help take control of your supply chain should be made aware of your goals, how they can help you achieve them, and how it would benefit you to become part of them.
Ensuring effective lines of communication is essential for business success, but even more so when it comes to sustainability as this can avoid mistakes that would result in excess waste.
Find like-minded suppliers
It can be difficult to reduce your carbon footprint without the support of the other businesses in your supply chain, so it may be worth considering which suppliers you continue to use if they are resistant to change.
If you exclusively deal with suppliers who share your green initiative, this is more likely to spark change in other suppliers who want to do business with you. This could then create change on a higher level than just your supply chain and have a positive effect on your industry as a whole.
You can check websites such as the British Climate Hub to ensure your suppliers have sustainable business practices, which will greatly help you take control of your supply chain.
Set sustainability targets
Most businesses will have sales targets, which act as a way to measure your success and incentivise employees. Sustainability targets can work in much the same way. Reviewing your supply chain wastage and emission-generating practices will give you a clearer picture of where your business needs to be more eco-friendly. This process will also help you to keep sight of your goals, as the benefits of going green are hard to recognise on a day-to-day basis.
Platforms such as supplier sustainability management firm, Vizibl, can help provide an accurate picture of supplier sustainability, so you can create realistic targets to help work towards taking control of your supply chain.
Review and overhaul your logistics
By consolidating your supply chain you can make it more efficient, as well as reduce your carbon footprint. Working with fewer suppliers means fewer deliveries and lower emissions.
It’s worth reviewing your current logistics and asking whether you have any deliveries that can be combined, if it’s plausible to order more stock in one go and receive deliveries less often, or whether you can switch suppliers on certain products to reduce the number of deliveries.
One practical solution may be to address and simplify your customer returns process, which, alongside the additional emissions it creates, often has a financial impact too. Ensuring that fewer items need returning, or that the process is efficient, can go some way to a more sustainable business.
Advance planning and adaptability
If you are too reactive in the way you do business, it can make it hard to reduce your carbon footprint. Planning in advance whilst still being adaptable to change is the best approach to a greener supply chain.
Working with your suppliers on a sales forecast for your business will help to reduce waste and decrease lead times. Plus, by planning ahead and asking if there are other sustainable materials you can use in times of a shortage, you will be able to run your business more smoothly all year round whilst being sustainable.
Reducing the carbon footprint of supply chains will go a long way towards reducing our environmental impact. Making ‘green’ changes doesn’t always have to involve a complete business overhaul but making a commitment to being more sustainable can inspire more to do the same.
Understanding your emissions
In order to fully benefit from these tips you must also measure and track your carbon emissions before attempting to reduce your carbon footprint. Your company has to look across its entire business, and emissions scopes, often referred to as “scope emissions” or scope 1, 2, and 3.
While emissions scopes might seem confusing at first, they actually help you create a GHG inventory by identifying your total emissions or how much carbon dioxide equivalent (CO2e) you emit based on everything it takes for your business to operate.
What do the different emissions scopes mean?
The Greenhouse Gas Protocol (GHG Protocol) divides emissions into three scopes:
- Scope 1 emissions – direct emissions from sources owned or controlled by a company
- Scope 2 emissions – indirect emissions from purchased electricity, steam, heat, and cooling
- Scope 3 emissions – all other emissions associated with a company’s activities
While scope 1 and scope 2 emissions might be the easiest to measure, tracking what is often the largest culprit of a company’s carbon footprint—scope 3 emissions—tends to be more tricky. Scope 3 emissions include an array of elusive carbon-emitting activities that, when added up, often account for more significant carbon emissions than Scopes 1 and 2 combined, even upwards of 75% of companies total emissions.
If a company truly intends to reduce or even eliminate its carbon footprint, it must address all three scopes, with particular attention paid special attention to scope 3.
Why measure scope emissions?
Measuring GHG emissions or creating an emissions inventory is critical to understanding your company’s carbon footprint and impact. If you want to reduce your emissions, you have to calculate them before creating a reduction target.
Emissions calculation through reliable ESG VC software is also good for business. It requires a deepened understanding of every part of your business—your own operations, product lifecycle, supply chain and value chains, stakeholder relationships, and all other related activities.
While carbon or GHG accounting might seem daunting, it should be the first step on your sustainability journey. You can utilise carbon calculators, such as the MacKay Carbon Calculator, to find out how you might reduce your greenhouse gas emissions. After that, you’ll be able to look for efficiency opportunities, waste reduction, or ways to streamline procurement or other essential activities.
Since the formation of the Paris Climate Agreement, the stage has been set for a new emissions accounting era, bringing additional regulatory standards, like the Sustainability Disclosure Requirements (SDR), the Sustainable Finance Disclosure Regulation (SFDR) and the Corporate Sustainability Reporting Directive (CSRD). Quantifying your emissions now will not only help you stay ahead of the legislative curve but also help you maintain a competitive business advantage.
Supply chains have a significant role to play in reducing carbon emissions and promoting sustainability. By optimising transportation, sourcing sustainably, improving operations, collaborating with suppliers, and promoting transparency, supply chains can help keep carbon emissions low and mitigate the impact of climate change.
As explained above there are also several business benefits of a cost-effective and sustainable supply chain, the most obvious one being the freeing up of cash to be allocated where it is needed most.
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