As we get closer and closer to net zero emission targets, it is critical that all industries tackle the challenge in any way possible. James Butcher, CEO at supplier collaboration specialist Supply Pilot believes that the supply chain needs to be acting now on accurately measuring its carbon emissions to be able to make the necessary changes to avoid a climate catastrophe
As a human race, we are at a point where we have no choice but to act now on carbon emissions or face disaster. While this seems dramatic, the upshot is that there is a sense from everyone – be that businesses, individual consumers or governments – that urgent action is required (and wanted), and that this is an opportunity to embrace change and innovation.
Carbon emissions are categorised in three scopes and in our industry, with Scope 3 – indirect emissions throughout the supply chain – being the most relevant. While there are several areas where these emissions are significant such as manufacturing, packaging, transportation, and cold storage of goods, this also presents a massive opportunity to innovate and make a change.
However, this can only be done if the talking stops and the action starts, and that begins with measurement.
CONTROL THE CONTROLLABLE
This climate emergency has the potential to dramatically restrict our ability to source raw materials and has a huge impact on biodiversity, so measuring the current status of emissions is crucial to calculating human and economic cost of our actions, and – most importantly – how to reduce it.
Many parts of the supply chain don’t measure data or impact, so have little to no idea where their product’s emissions coming from, what the impact source is and what its true carbon footprint looks like. However, retailers hold the cards in this situation, and the key is for them to leverage their impact and influence on the supply chain to make a difference.
If – as is the case with many suppliers – they don’t have the data to work from or the carbon literacy to understand what it means for their business, the key then becomes understanding the supplier’s readiness and tailoring the approach around that.
Through understanding the suppliers’ level of maturity around certain initiatives and their capabilities when it comes to capturing the data required, the retailer is in a much better position to start the appropriate conversations.
By taking this approach, retailers can then choose their suppliers carefully, mandating what materials and ingredients are involved. In asking for help in understanding of carbon footprints, retailers can also hold significant influence over how the supply chain approaches sustainable practices.
Manufacturers are influenced by their key relationships with retailers and brands as well as by regulatory oversight, so it falls to retailers and the government to invest in the tools and knowledge to implement and collaborate in a way that trickles down throughout the supply chain.
START WITH QUICK WINS
Taking your own small steps to tackle the climate crisis as a business can feel a little like turning up to a gunfight with a peashooter, but there are ways in which impactful quick wins can be achieved.
Retailers and brands should start talking to suppliers about how they can collaborate on things like making full use of containers to prevent empty running, or how they consider the warehouse location and the possible role of electric vehicles in relation to the final mile.
There are also conversations to be had around increasing the use of trains to minimise road and air travel, charging points at haulage rest stops, and packaging design that can go from pallet to shelf without wasted air – all can make a difference, but the conversations need to be started
Retailers too can learn from their own development strategies. By having a better idea of how to talk to suppliers about sustainability, they can identify how they determine success and what they measure already.
ALL ABOUT PRIORITIES
As highlighted at the start of this piece, it is a long journey to getting this correct, so prioritisation is key. Start by talking to both suppliers and your internal procurement, sourcing and logistics teams to get a feel for your starting point, and then create an accurate inventory of your Scope 3 emissions as a baseline.
From there, you can set a target that is measured using quantifiable data and check your sourcing policies against your methodology for improving. The important thing to realise is that you are not alone in this journey – many other businesses will have ambitious targets for climate impact reduction, so learn from them and the challenges they have faced.
Playing our part in solving the climate emergency is no small task, and a lack of resource and diverse number of suppliers – many of whom may be reluctant to share data because of confidentiality – doesn’t make it any simpler.
However, by setting clear expectations, having measurable targets and working collaboratively and communicatively, we as an industry can face the challenge and make improvements, together.