Decarbonizing supply chains: 5 myths to avoid greenwashing
Various studies argue that the supply chain contributes to more than 80% of greenhouse gas emissions. Supply chain decarbonization has been identified a “game changer” for corporate climate action. Instead, many companies are falling into the trap of corporate greenwashing. There are 5 myths to avoid greenwashing.
- Decarbonizing supply chains initiatives are top-down
Decarbonizing programmes do not start by investing in luxury electric cars for the management, but decarbonizing starts at the factory floor! in particular through energy efficient lighting, energy efficient equipment, solar panels on rooftops of building to harvest energy from the sun for daytime operations, and water management at the plant (for example: using rain water for cleaning and toilets). Much expertise lies with workers to identify quick wins. In other words, a bottom-up approach is needed.
- Decarbonizing supply chain efforts are pushed to your suppliers
Decarbonizing programmes do not start by putting all decarbonizing efforts to your suppliers, but by investing in sustainability programmes for your own manufacturing operations first. This experience can then be shared with your supply chain partners, both upstream and downstream. Decarbonizing supply chains efforts require leading by example by the brand owner in order to realise a successful decarbonization across your supply chain.
- Decarbonizing supply chain redesign scope: own operations, upstream and downstream
Decarbonizing supply chain redesigns are not executed by just scoping climate actions in: own operations, upstream supply chain, and downstream supply chain. Instead, brand owners need to seek what I call ‘economies of chains’: looking for a new supply chain designs that link your supply chain to other ecological fitting supply chains and clusters (ecosystems) that increase the business value significantly as well as reduce its environmental impact.
- Largest decarbonizing supply chain impact is upstream your supply chain
Quick wins in decarbonizing supply chains are not upstream, where you are dealing with full containers over water, but downstream in (last-mile) distribution where there are bigger opportunities for consolidation of transportation and storage with other and often competing supply chains. Horizontal collaboration with other industries and competitors is an important strategy to address decarbonizing supply chains for brand owners. This also requires well-organised urban logistics initiatives in big cities, demanding innovative logistics solutions leveraging water infrastructure (like rivers and canals), rail infrastructure (like LRT, MRT, Tram lines), and road infrastructure (walking, cycling, bus, and car lanes).
- Decarbonizing supply chains start by exchanging emission data with suppliers and set ambitious reduction targets
Decarbonizing supply chain action does not start by implementing advanced IT systems and push these high-tech IT requirements to your supply chain partners, hereby eliminating SMEs in developing countries from your supply chain, that might be regarded as the weakest link in measuring and decarbonizing your supply chain. Decarbonizing supply chains require a redesign of supply chains, seeking economies of chains, education, and collaboration to increase business value and reduce environmental impact. Decarbonizing supply chains require success stories that are energised by win-win, not win-lose.
I wish you success and wisdom in decarbonizing your supply chains. For more information on decarbonizing supply chains, visit our website www.lbbinternational.com.
Dr. Marco Tieman is the CEO of LBB International, a supply chain strategy consultancy and research firm, advising companies and governments on supply chain analysis, supply chain design, and market research. He is also an Adjunct Professor with UTM Azman Hashim International Business School in Malaysia, conducting research on halal procurement strategy, halal supply chain management, and halal risk and reputation management. He is the author of ‘Halal business management: a guide to achieving halal excellence’.