SUSTAINABLE PROCUREMENT
PROACTIVE AND GREEN
SUPPLY CHAINS
Peter Klein, Vice President of Supply Chain
Consulting, says that no company will
remain unaffected by future regulation and
investor and consumer scrutiny when it comes to
auditing a company’s carbon footprint.
M
anaging a company’s right across the organisation, and the shifting production overseas to take
carbon footprint in order financial impacts all that entails, goes well advantage of immediate benefits, the
to become more ‘carbon beyond putting a few systems in place and question has to be asked, is the overseas
friendly’ is now a priority. although energy efficiency and low carbon manufacturer using inefficient, dirty energy?
The climate change energy supply play their part, it isn’t all of it. I believe that managing the carbon
debate as well as tough Some companies will opt for carbon offsets, footprint through the sourcing, manufacture,
demands and targets being talked about in buying carbon credits from others. This often transport and distribution of goods is the key.
Government, have come a long way in the results in buying more carbon offsets than is Supply chain intervention has been used
past year. Universities around the world actually necessary - and as the price of successfully by companies for decades to
continue to look at BAT (Border Tax offsets increases in the future, could prove an improve their financial bottom line. Successful
Adjustments) as the way to support stringent expensive exercise. companies have expanded their field of vision
emission trading from countries that don’t One way is through analysing supply to look at the processes and operations of the
adopt stricter carbon controls. As we enter a chains at all levels, reducing the carbon companies that they buy from and companies
more carbon controlled world, most footprint at various stages be it procurement, that they sell to.
companies are now aware of the need to product design, manufacture or distribution. The same approach can be applied with
tackle their carbon footprint, yet many To reduce your footprint you need to know a carbon audit - capturing greenhouse gas
business leaders and organisations still don’t which bits of the company are responsible for emissions data upstream and downstream -
accept that reducing greenhouse gases can the sources. And often you need to look carbon visibility - and knowing when any part
make good economic sense. beyond your own four walls. Some of the organisation is likely to emit at a rate
And as oil prices surge towards $100 a companies can have hundreds - even that is not acceptable.
barrel, it is not surprising that there is thousands of suppliers. Many companies now It might involve companies in switching to
growing corporate climate awareness. consider that a cradle-to-grave analysis the alternate fuel sources - or turning their waste
Yet the key issue facing all companies is best way to start reducing their carbon into an energy source; it might mean
the trade off between the carbon footprint emissions. Tesco, for example, has warehousing overseas or switching from
and financial performance - how to deliver announced that intends to cut carbon in every wooden to plastic palettes. But there’s no
emissions reductions while performing product it makes - and that it will halve need to throw the baby out with the
financially and keeping investors and emissions from existing stores and distribution bathwater, replacing existing systems in which
consumers content. centres worldwide by 2020.And now Wal- companies have invested millions over years.
As companies start to look at the impact Mart is to undertake a pilot project asking When Governments start to issue their
they have on the environment how to many of its suppliers to measure standards, no one will have all the answers.
determine reduction strategies that do not their emissions. But businesses aren’t charities and companies
have an adverse effect on overall financial The theory behind this is sound. Your must be able to take information from
performance can be very difficult. It’s difficult company can’t be sustainable if your supply multiple sources, have access to data that
to know where to start - how to formally chain isn’t. As we have seen with the WTO enables them to run different supply chain
measure CO
2
in the face of different and GATT, you will need this detailed scenarios that compare both environmental
calculation measurements - and also where information if you want to sell your goods and economic performance.
to end. around the world and be competitive. If BAT It is perfectly feasible for companies to
Reducing any company’s carbon footprint is adopted in the coming years any implement green
organization that is selling cross border will strategies, at the
have to know the carbon footprint of their same time improving
supply chain. Where are your value adds their business
(carbon adds) ? As it works with VAT today performance.
you need an accounting system to make sure Improved productivity,
you are paying the proper amount of tax. increased efficiency,
You must understand the activities of your reduced waste and
trading partners - the preparation of raw lower capital are just
materials, manufacturing and transportation. a few of the benefits
(Incidentally, transportation is not always that can be seen
responsible for the most emissions although it when a green supply
is inevitably that that comes first to mind); chain approach is
And although companies may think of adopted.
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SUSTAINABLE FM | NOVEMBER 2007
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