How the Global Supply Chain is Doing its Part to Fix Climate Change

Guest blog written by Cassie Pierce

A growing concern for sustainability has transformed how companies are designing their products and marketing them to an increasingly green public. But these initiatives are just the start, as many have also begun making adjustments behind the scenes with regards to their supply chain — and rightly so, given that a McKinsey report reveals that it is responsible for 90% of a company’s environmental impact.

With this in mind, here’s how today’s businesses have been adding to the growing cause for sustainability, starting with their supply chains.

Planning More Efficiently

A simple miscalculation between supply and demand often leads to the overproduction of certain materials, which results in a lot of wasted energy and resources. The power of machine learning and predictive analytics can help with more accurate forecasting, so that companies—especially ones constantly replenishing stocks, like Amazon—can help procure the right amount of supply to meet the market’s demand.

Encouraging Transparency

Supply chain managers need to monitor how their suppliers are extracting and producing raw materials to ensure that they’re following sustainability policies in their country or region. For instance, the new EU directive requires companies to report their sustainability performances, since they’re needed in the risk analyses and investment decisions by investors, banks, and pension fund managers. In this regard, the International Resource Panel recently developed an online tool that allows countries to see possible hubs for unsustainable practises within their area, so they can take the necessary steps to address them.

Improving Packaging

Every day, massive amounts of energy are used in the production of traditional packaging materials such plastic, paper, and foam, which are quickly discarded once they arrive at a consumer’s doorstep or a company’s stock room. In response, more sustainable packaging is now being created out of recycled waste material to reduce the consumption of resources. They’re usually compostable, recyclable, and versatile enough to use for most items including—but not limited to—food, electronics, and clothes. Speaking of food, one of our participants, RefillaBowl, has even found a way to make takeaways more sustainable and solve the single-use problem of ordering food.

Using Alternative Fuels

Cars and other fuel-powered vehicles, like planes and ships, are the biggest contributors to smog and air pollution around the world. This is why a lot of companies are slowly switching to alternative fuel sources such as water and electricity to lessen the amount of greenhouse gases businesses contribute to the atmosphere. In fact, there are even organisations such as AM Group whose main purpose is to research, design, and manufacture clean energy alternatives and products.

On the other hand, electric-powered vehicles are another type of cleantech initiative, or an investment philosophy companies use to up their profits while minimising negative effects on the environment. According to Start-U-up founder Ron Bloemers’ speech at the 2019 MELT Innovation Forum, global cleantech markets are expected to rise between 2020 to 2050 for economic reasons alone.

Optimising Driving

In line with efforts to switch to alternative fuels, logistics providers are also looking to optimise the way they transport goods from one point to another. Today’s company carriers are usually equipped with GPS tracking software to determine the shortest and most fuel-efficient paths for each delivery. Moreover, a feature on Verizon Connect explains how instilling better driving habits saves a lot of fuel, too. Actions such as harsh braking and sharp acceleration all increase fuel consumption and, in turn, carbon emissions, which careful driving can prevent. Reducing the amount of unnecessary cargo they bring, such as empty boxes, is also another step.

Reducing Refrigeration

Reducing electricity use has always been a priority for any company from both sustainability and profitability perspectives. And in supply chain management, electric consumption is an important factor in warehousing, especially for food and other businesses dealing with perishable commodities. A report by Supply Chain Dive reports on how refrigeration is one category that consumes a large percentage of energy consumption across all commercial buildings, second only to lighting. One solution is the use of Thermal Energy Storages, which balances temperature and refrigeration run time to maximise energy reduction. Glassolina has actually done something like this for greenhouses, where they have created translucent wood plastic composites to reduce buildings CO2 emissions. A similar solution can help companies reduce energy consumption and their carbon footprint while still protecting food and other perishable goods.

These initiatives, big and small, contribute to larger and much-needed environmental reforms. Although there is still much to be done towards minimising the supply chain industry’s environmental impact, these practices are paving the way towards a greener and more sustainable future.

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