Supply chain decarbonization has become a hot topic these days, and for good reason: environmental, regulatory, and stakeholder pressures have put the onus on the transportation and logistics sector to slash greenhouse gas emissions.
That said, reducing supply chain emissions should be much more than just a compliance exercise. Supply chain emissions reduction can be a beneficial and strategic opportunity for companies to enhance efficiency, reduce costs, and build a competitive advantage. Let’s explore how in this post.
The Compliance Imperative
The most obvious reason for making supply chain emissions reduction a priority is seeking to be compliant with climate change-related regulations. Aggressive blueprints to tackle climate, such as those offered by the state of California and the European Union, have caused the rise of accounting standards and guidance, such as the GHG Protocol, to help businesses monitor and track emissions.
But there are a number of challenges that can occur if companies adopt a compliance-only approach to reducing GHG emissions along the supply chain.
First off, a short-term focus on avoiding penalties can stifle innovation. It encourages businesses to focus on the lowest-hanging fruit instead of aiming for actions that will benefit both the company and the environment in the long term. Second, a compliance-only approach can limit cost savings as well as result in inefficiencies in operations as companies seek a quick fix. Third, there is an increased risk that a short-term focus will have a limited shelf life as regulations evolve and tighten, requiring companies to slash emissions even further.
Beyond Compliance: The Business Case for Supply Chain Decarbonization
Despite the potential disadvantages of focusing on compliance-only approaches to reducing supply chain emissions, some businesses may still need convincing that longer-term solutions are the best option from an environmental and cost perspective.
Companies need to realize that a demonstrated commitment to reducing GHG emissions gives them an opportunity to shine in a crowded marketplace. Not only are eco-conscious investors and customers intrigued and inspired by companies that are sincerely dedicated to bettering the environment, but businesses can realize cost savings stemming from reduced energy consumption, optimized logistics, and waste minimization. In addition to these potentially advantageous outcomes, a sustained commitment to supply chain emissions reductions in the future will protect the supply chain against regulatory changes, energy price volatility, and climate risks.
Mitigating Carbon, Mitigating Cost: Three Strategies for Supply Chain Emissions Reduction
Once a company commits to reducing GHG emissions along the supply chain, there are a number of steps that a company should undertake to reinforce that commitment and ensure the successful deployment of sustainability initiatives. Below are our suggestions for those steps.
Data-Driven Decision-Making
To make sound and wise decisions to reduce GHG emissions, companies need to track, monitor, and analyze where emissions are taking place so they can take steps to reduce emissions successfully. This means collecting emissions data—and knowing what to collect and when and where to collect data.
This is where Greenabl can help. Our technological tools, such as emissions tracking software and carbon footprint calculators, offer advanced analytics to identify high-emission areas and inefficiencies. For instance, by tracking the emissions output of various routes, companies can learn how to optimize routes and be mindful of warehouse locations to reduce fuel consumption. Taking a step as simple as this can reduce emissions output, lower operational costs, and promote enhanced efficiency.
Supplier Collaboration
Partnering and collaborating with like-minded companies also dedicated to reducing GHG emissions enables businesses to tap into the shared knowledge and experience of others. One example of an effective partnership that promotes sustainable practices is one where companies mutually seek to improve material sourcing or adopt renewable energy use targets.
At Greenabl, we specialize in creating tools and opportunities to engage suppliers in shared sustainability goals, such as the Transport Emission Reduction Certificates we offer with Eco-Energy to reduce lifecycle GHG emissions.
Regardless of the companies a business may partner with, we can all agree that strengthening relationships with other businesses along the supply chain fosters dialogue and allows for opportunities to build a greener supply chain.
Technology Integration
On top of data-driven insights and valuable collaborations, effective supply chain emissions reductions also rely on the successful integration of technological solutions. Doing so unlocks not only a reduced carbon footprint over time, but also significant long-term savings.
Greenabl’s technology solutions include IoT for real-time emissions monitoring and artificial intelligence for predictive logistics planning. Access to these tools is through our digital platform, which enables shippers to look at supply chain emissions reductions holistically.
Greenabl: Your Ally for Strategic Supply Chain Emission Reduction
As your company considers long-term strategies to reduce GHG emissions, consider working with us to help you get there. We help businesses go beyond compliance with tools and strategies tailored to individual companies’ unique supply chains.
We offer comprehensive emissions tracking and analytics, strategic insights for sustainable supply chain transformation, and tools that encourage collaboration with suppliers and other stakeholders to reduce emissions.
We work with both shippers and carriers toward the mutual goal of cutting emissions along the whole length of the supply chain.
Don’t Be Shortsighted and Stay Stuck in Quick Fixes
We’ve gone through several reasons why companies should focus on developing and cultivating sustainability initiatives for the long term instead of merely concentrating on short-term wins to cut emissions. We’ve also looked at several strategies businesses can deploy to get started on that journey to a lower-emissions future.
The next step is to actually take those first steps toward effective supply chain emissions reductions. Contact us today—we can’t wait to work with you.
