Part One: How Green Is My Supply Chain?

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Environment, Green

The concept of climate change and the need to reduce carbon emissions is far from widely accepted in the U.S., but viewpoints are beginning to change, largely due to customer demand. Japan and the European Union were early converts to the argument that we are changing our planet’s weather patterns, and much of the current legislation is appearing in these countries. Given the trend, though, the U.S. will not be far behind.

We have all heard a great deal about carbon emissions and the ways both individuals and companies can reduce electricity usage and save on transportation. That’s the easy part. The expenditure is simple to quantify, and the carbon emissions are easy to measure. The much larger challenge for companies is measuring the carbon footprint of a product, defined here as the total set of greenhouse gas emissions caused by the production of one unit of a product. This implies knowledge of the carbon emissions released at each stage of the supply chain and production as well as the transportation of all the raw materials and components. To offer an example, the Carbon Trust, an independent company funded by the UK government, recently illustrated the components that create the carbon footprint of a can of cola.

The carbon footprint of cola is comprised of five components:

  • Raw material as used in farming, making aluminum cans, and refining sugar
  • Product manufacturing for both the packaging and cola in the can.
  • Distribution and retail, including transportation and chilled storage
  • Consumer use and refrigeration
  • Disposal and recycling

As one can see, the transportation and energy are only part of this process. The process evaluates energy usage through the entire supply chain, which means it also includes all of the sub suppliers.

 

“Well,” you may say, “that’s interesting. But why bother?”

 

Not so long ago, many companies would have agreed with you and left it there, but times — and views — are changing. All products are ultimately sold to the general public, or, at the very least, contribute to the manufacture of other products sold to the general public. A steel billet might not be a consumer item, but it is used to make the steel sheet that helps create your car. It is consumer demand that will change thinking in this area. Public opinion, right or wrong, will also drive governments to legislate for reductions in the carbon footprint of everything we consume in an effort to reduce greenhouse gas emissions and mitigate the effects of climate change. Nobody will have the option to ignore new legislation simply because they don’t believe the science.

 

–Stuart Burns

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