For most companies, the vast majority of their greenhouse gas emissions are in their supply chains.
In fact, a McKinsey report on sustainability shows that the supply chains of consumer-packaged goods account for more than 90% of their environmental damage, including 80% of emissions.
For companies that do invest in sustainable and transparent supply chains, there are benefits to be seen across the entire business. This includes improvements in regulatory compliance, enhancing business branding and reputation, and reducing waste and overhead.
Even small changes to your chain can make a huge difference, and by successfully integrating environmentally responsible principles into your supply chain management you can massively reduce your business’s footprint.
Ensuring that you have an optimised supply chain will also attract new customers to your business, especially if you publish this information on your website.
These next five steps will help you get started on your journey:
Assess Your Supply Chain for Sustainability Issues
The very first step in this process is to analyse your current supply chain. Break it down into smaller elements to help identify which one can be improved; for example, how can you reduce transport emissions?
Some areas may not be so obvious. Perhaps the factory produces hazardous chemicals, or the working conditions are below standard? Or perhaps there are health and safety risks in your depot, or even your offices? Addressing issues such as these can often help you become more sustainable, too.
Most supply chains begin with materials, which are then shipped to the manufacturer. The resulting products are then shipped to distribution centres, before then going to their final destination. After use, many of these products will end up as waste.
A circular supply chain, on the other hand, seeks to reduce and eventually eliminate waste by adding in two new steps into this process; recycling the products and sending them back to the manufacturer. This way, they can be remade over and over again, and waste doesn’t have to be worried about.
Reduce Transportation Emissions and Dead Mileage
Moving to electric and other sustainable vehicle options is the best way to reduce transport emissions, but if this is not possible there are still ways to improve in this area. For example, route optimization can massively reduce fuel consumption and reduce the environmental impact of all transport and distribution.
You can also reduce emissions by making use of the return journey after goods have been dropped off. Perhaps there are materials that could be transported back to their starting point, or maybe you a portion of the return journey could go to transporting materials for another company?
While some big organisations can control their entire supply chain, most businesses will engage with suppliers, haulage companies, and many other third parties. Even though you don’t have direct control over their operations, that doesn’t mean you have to write off these links when trying to make your supply chain more sustainable.
Instead, engage with your suppliers, encourage and reward positive attitudes towards sustainability. This can be small steps such as making sustainability a regular part of your conversations, or providing recognition and rewards. You can also even share the costs of sustainability improvements.
Use Technology to Gather Insights
For many organisations, monitoring the performance of trading partners and truly understanding the ethical “pulse” of supply chains remains a significant challenge. Nowadays, however, advanced analytics, artificial intelligence, and machine learning tools can provide a helpful solution. The offer a wealth of insights into day-to-day processes and can apply measurable outcomes across the entirety of your supply chain.
Through the use of AI or analytics dashboards, businesses can consistently monitor the performance and sustainability of their supply chain. This information can be uses to make strategic business decisions such as renewing contracts with sustainable suppliers and terminating those who aren’t doing as well.
Good analytics and reporting can also help to simplify your supply chain process and make sure that every change that reduces waste, speeds up delivery, or enhances quality, is also helping you take more steps to becoming sustainable.
Assessment of your supply chain is included in Play it Green’s Net Zero Framework, free to access for all of our business members.
The Framework allows the business to review, plan and set actions in 9 key programme areas that will ultimately take them to net zero: Governance, Energy and Emissions, Food, Procurement, Transportation, Venue, Resource Use and Waste, Water, and Projects and Workforce.