Green Supply Chains: Strategies for Decarbonizing Supply Chains

Three Steps to Reducing Carbon Emissions in Supply Chain Management and Procurement

In an increasingly sustainability-oriented world, decarbonizing your own company’s supply chain is unavoidable. By reducing greenhouse gas emissions and promoting sustainable practices, you can take ecological responsibility, which will strengthen your brand’s reputation. A sustainable supply chain doesn’t just fulfill regulatory requirements. It also makes you more competitive, because it reduces costs and boosts your resilience in situations of risk. Generally speaking, decarbonizing your supply chain is a strategic investment that provides opportunities for innovation, differentiation, and long-term profitability.

The following questions about sustainability may arise going forward:

• What are the reporting duties that I’m going to have to fulfill in carbon accounting?
• Where are the greatest greenhouse gas emissions in my business and along my supply chain?
• What will the cost impact of carbon price changes be on my business?
• How and at which suppliers, locations, and so on can I significantly reduce my carbon footprint?
• How can SCM and procurement add the most value in decarbonizing my supply chain?

We’ll help you answer these and other questions on the topic of carbon accounting and decarbonization. That way you’ll get a quick and pragmatic overview of your emissions drivers. The insights this will give you will form the basis for reporting in compliance with leading sustainability reporting standards and frameworks, and for your emissions strategy and decarbonization roadmap and their implementation.

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The greatest challenge in this area is obtaining full transparency about current Scope 3 emissions produced in connection with your company, because a lot of suppliers don’t yet provide these figures. That’s why we recommend a pragmatic hot spot analysis using emissions factors that estimate the primary emissions sources and then validate and complement them step by step using dependable figures. The aim is not to obtain perfect figures right away. It is to begin on a solid foundation and work towards increased accuracy in the figures produced over time. This approach allows you to begin implementing targeted emissions reduction measures quickly.

Other challenges include:

• Necessary investments in technology and infrastructure as well as staff expertise
• Complying with growing environmental regulations and standards, such as those pertaining to reporting
• The need for continuous innovation, so as to execute and identify ecofriendly practices
• The need to work efficiently with suppliers, partners, etc., to ensure that the supply chain is fully decarbonized

Relevant Characteristics of a Sustainable Supply Chain

A sustainable supply chain uses resources efficiently and reduces environmental burdens by employing renewable energies and ecofriendly materials. Costs are reduced through the use of efficient transport and logistics solutions and optimized warehousing. A green supply chain incorporates transparent processes that make it possible to measure energy consumption and its effects along the whole supply chain. Businesses work closely with suppliers and partners to develop innovative solutions and achieve ecological targets. They also consciously take responsibility and actively seek to protect resources.

The following aspects of supply chain sustainability can be promoted:

• Identifying and reducing the supply chain’s biggest emissions sources
• Sustainable logistic solutions based on an analysis of your company’s own modes of transport
  • Route optimization
  • Alternative fuels
  • Electric vehicles
• Renewable energy use
• Software tools to simplify collaboration with suppliers and identify relevant potential to reduce emissions for suppliers, etc.
   

This is how you, with the help of our expert consultants, can optimize the decarbonization of your supply chain.