April 24, 2023 | Supply Chain Strategy
The pressure on organizations to consider the environmental impact of their supply chain processes is increasing. Businesses are looking for ways to reduce their carbon emissions to comply with regulatory requirements and building a CSR reputation.
Adopting environmentally friendly measures like recycling, reducing wastage and purchasing sustainable goods is the key.
Here are some of the tips for effective carbon footprint reduction in the supply chain:
Supply chain visibility is the key to enhancing efficiency and reducing wastage. By gaining transparency across the supply chain processes like transportation, manufacturing and storage processes, businesses can easily identify the bottlenecks and opportunities for effective carbon footprint reduction.
This includes measuring the carbon footprint of your supply chain with tools such as Greenhouse Gas Protocol to estimate your emissions. The analysis will easily help identify opportunities where you can reduce your carbon footprint.
One of the biggest contributors to increased carbon emissions in the supply chain is transportation. Strategize your transportation methods to see if you can use a more sustainable option, like electric or hybrid vehicles. You can also consolidate shipments to decrease the number of trips.
If businesses are trying to develop carbon reduction techniques, then they need to engage experts for better results. Depending on the experience of partners and suppliers, engaging in a carbon reduction technique can be productive.
Not all suppliers are laggards in sustainability – some are just waiting for opportunities to improve. Introducing collaborative strategies and training sessions for suppliers can enable both parties to make strides in reducing their carbon footprint. Moreover, you can also select suppliers who prioritize sustainability – they must consider sustainability criteria like carbon footprint.
Consider using supplier sustainability scorecards to evaluate suppliers’ sustainability efforts and track their progress over time.
Data can be leveraged to reduce carbon footprint by measuring and tracking carbon emissions, identifying opportunities for energy efficiency, optimizing transportation, using renewable energy, and encouraging sustainable behavior among individuals and organizations. Critically analyze data to draw patterns to identify the opportunities to eliminate carbon emissions. For instance, businesses must analyze data across shipments, including returns and reverse logistics to see the efficiency of business processes.
Recycling and contributing to the circular economy are vital for sustainability. Recycling processes can bring change on a large scale. Reusing and recycling the resources that otherwise would be thrown away would make a big difference to contribute to the circular economy.
The concept of circular economy involves repurposing the waste generated by commercial activity from using limited resources. The transition to a circular business model will disrupt the supply chain as we know it. Through methods such as leveraging renewable energy sources and recyclable or reusable material, businesses can effectively transition from cradle-to-grave to the cradle-to-cradle (C2C) concept. In this new paradigm, waste can become new material for a new product cycle. As companies seek to eliminate their negative environmental impact, it is logical that they should build a robust circularity strategy.
Most businesses have sales targets to measure the success of an organization. But many do not pay attention to sustainability targets. Setting sustainability targets is crucial for the long-term growth of an organization. Reviewing the emission-generating practices and wastage will provide a clear picture of where it needs to be more environmentally friendly. This whole process will also help keep sight of the business objectives, as the advantages of going green are tough to recognize on a day-to-day basis.
Eliminating or decreasing the carbon footprint from supply chains will enable businesses to meet their sustainability and corporate social responsibility (CSR) goals. Reducing carbon emissions can be done by effectively collaborating with suppliers, optimizing shipping/delivery routes, looking for alternative fuels, setting sustainability KPIs and more.