Supply chain decarbonization: the way forward

Getting to a global net-zero emission supply chain sounds like an impossible and expensive task, but it may be cheaper than one might think.

This is according to an article published in the recent State of Green Business report by Michael Holder, “The Price is Right.”

Holder, a BusinessGreen reporter, writes that “setting ambitious net-zero targets for a company’s core business is one thing, but achieving deep decarbonization across the entire supply chain is quite another.”

Many, if not most, supply chains are highly complex and reach across the globe, so measuring and mandating emissions is daunting. “Yet without action to get to net-zero emissions across every corner of the global economy, the planet’s climate will continue to warm.”

He referred to a recent report, “Net-Zero Challenge: The “Supply Chain Challenge,” from the World Economic Forum (WEF) and Boston Consulting Group (BCG) noting that, as well as being a “game changer” in the fight against climate change, decarbonizing supply chains is possible with readily available technologies and at surprisingly low cost. Some of the majore findings from the report include:

Many companies can multiply their climate impact by decarbonizing supply chains
Eight supply chains account for more than 50% of global emissions
Net-zero supply chains would hardly increase end-consumer costs. (Around 40% of all emissions in these supply chains could be abated with readily available and affordable levers)

Decarbonizing supply chains will be difficult; the report outlines nine major initiatives every company can take:

“Through interviews with several dozen global companies that lead the way in reducing supply chain emissions, we have identified nine key actions: (1) build a comprehensive emissions baseline, gradually filled with actual supplier data; (2) set ambitious and holistic reduction targets, reducing emissions by (3) revisiting product design choices and (4) reconsidering (geographic) sourcing strategy; (5) set ambitious procurement standards and (6) work jointly with suppliers to co-fund abatement levers; (7) work together with peers to align sector targets that maximize impact and level the playing field; (8) use scale by driving up demand to lower the cost of green solutions; and – finally – (9) develop internal governance mechanisms that introduce emissions as a steering mechanism and align the incentives of decision-makers with emission targets.”

There is no time like the present to get started.

Further reading: