With climate scientists and negotiators from 190 countries recently announcing a landmark deal to cap the rise in global temperatures to well below 2◦C from pre-industrial levels – now is a good time for everyone to start thinking about what the deal in Paris will mean for their businesses.
For supply chain managers – our contribution to climate change; impact of climate change on our supply chain operations; and our responsibility to do something about it – can no longer be ignored:
- With approximately 45% of total CO2 emissions caused by the production and transportation of goods, supply chain managers have a direct responsibility to make their operations efficient, cleaner and planet-friendly. No meaningful reduction in global emissions can be fathomably achieved without supply chain managers taking our fair share of responsibility for this issue.
- As a great example of today’s interconnected world of commerce, insurance giant Allianz recently announced thatlosses due to business interruption claims have overtaken property damage losses due to the proliferation of lean, global and interconnected supply chains. The increasing frequency and severity of climate disasters caused by global warming across the planet means supply chain managers not only have to build more resilient and risk-tolerant supply chains, but have a responsibility to minimize the rise in global temperatures.
- The deal in Paris means developed countries in North America and Europe have to cut emissions by at least 30% – 40% from 2005 levels by 2030. To that end, legislative initiatives will likely begin to mandate emission targets for different industries that supply chain managers will need to start adhering to. All this means that lowering CO2 emissions from your supply chain is no longer just a pet project of your Prius driving CEO, but something that could very well start affecting the compliance and the bottom line of your business.
So what is a supply chain manager to do?
Begin by building a baseline understanding of your current supply chain’s carbon footprint. Take the maxim “measurement leads to improvement” for your supply chain’s CO2 emissions and begin to track, model and build operating constraints around it. Look at innovative technology for energy sources and transportation modes, and make pro-active changes that can help you lower your business’ carbon footprint. For a more ideas and details on what you can do, check out the next blog in this series.
Our community of supply chain managers, thinkers and technology providers has transformed supply chain operations over the last twenty years making them leaner, faster and more cost efficient. Our collective analytical horsepower and tools can no doubt help us build a more planet-friendly supply chain and we have a professional, personal and ethical responsibility to start doing it now.
You can read Part II – Glasgow 2021