May 17, 2020

Carbon emissions policies and supply chains

Supply Chain
sustainable
gowling
wlg
Ben Stansfield, Gowling WLG
3 min
Ben Stansfield, Environment Partner at Gowlign WLG, discusses the key factors facing supply chain management from a sustainability perspective
Decarbonisation has rapidly become a C-Suite issue in 2019 and, given that many countries are expected to follow the UK's lead in legislating for "net z...

Decarbonisation has rapidly become a C-Suite issue in 2019 and, given that many countries are expected to follow the UK's lead in legislating for "net zero" emissions by 2050 or sooner, it will continue to be high on the agenda. The ability for businesses to remove carbon dioxide and other greenhouse gas emissions from their supply chains will determine whether they continue to exist in the medium-long term – it's that fundamental. In the short-term, there may be competitive advantage in removing emissions from the business faster than legislation requires – in fact, the need to 'go early' will largely be driven by demands from customers, employees, investors and perhaps also funders.

Making bold announcements about decarbonising is of course the easy bit. The hard yards for every business will be in formulating the strategy and then implementing it. Moving towards "net zero" means robustly auditing the supply chain, working with suppliers to find environmental gains without affecting quality; looking for new materials; incorporating "green threads" through supply chain contracts; undertaking regular monitoring; and always looking for further environmental improvements.  

As dialogue surrounding climate change continues to grow, pressure from stakeholders and consumers has driven many organisations to review their environmental footprints, pledge to cut their emissions, invest in green technologies and improve their sustainability performance. Ahead of COP25 talks, there have been more calls for greater carbon disclosure, with one suggestion that directors of companies that fail to disclose their carbon emissions should face sanctions.

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This would be a drastic step. However, in this age of transparency, consumers and stakeholders want ever-more insight for business processes and it is likely that companies with the greenest credentials will soon have competitive advantage. What is critical, however, is to ensure that the carbon footprint of subcontractors and supply chains are taken into account in assessing green credentials - if they are not, then companies could potentially shift high carbon emissions down to their suppliers in other parts of the world. 

Given the above, the next step is to ensure that decarbonisation changes are made in partnership with subcontractors and suppliers, and include all parts of the supply chain to truly implement solutions to address carbon imprints. Businesses should consider:

  • Mapping their supply chain and identifying where carbon emissions are generated and by whom;

  • Liaising with current critical suppliers to identify carbon reduction measures – which might require investment or process changes; 

  • When negotiating new contracts with suppliers, identify their policies regarding carbon emissions and what processes they have in place, and consider appropriate climate and decarbonisation provisions;

  • Consider if changes in procurement strategy need to be agreed with customers in advance, and what opportunities may exist to develop strategic green partnerships with customers or other parties in the supply chain.

 

Ben Stansfield is an Environment Partner at Gowling WLG

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May 17, 2020

How real-time visibility of the supply chain can help mitigate food waste

Zetes
Supply Chain
Management
Visibility
Amir Harel, General Manager, V...
4 min
How enhanced supply chain visibility can make a positive impact in the fight against food waste
In today’s market, consumer demands have not only driven supply chain efficiencies for greater speed and convenience but are increasingly now forcing...

In today’s market, consumer demands have not only driven supply chain efficiencies for greater speed and convenience but are increasingly now forcing retailers to address expectations of improved sustainability. The consequences of keeping up with customers’ wishes aren’t always easy and may have an adverse effect on short term business plans and processes, especially if your supply chain isn’t as seamless and transparent as it should be. Even the smallest of inefficiencies can add up and lead to all manner of waste during production, transport and even disposal.

Over recent years, the grocery market has come under scrutiny and intense pressure to re-evaluate its approach to tackling food waste, with around 88 million tonnes worth being generated yearly across the EU, a staggering 40% of food doesn’t even make it to the market. 

The problem is, without real-time insight into the exact status and condition of product and inventory within the end-to-end supply chain, what options do companies have to address waste and improve customer engagement? Amir Harel, General Manager of Visibility Solutions at Zetes, explores how complete real-time, intelligence-driven visibility of the supply chain can help mitigate food waste.

The Lack of Supply Chain Visibility

The world is ready for change. According to REFRESH, an EU research project acting against food waste, resources being lost and wasted in Europe would be enough to feed all the hungry people in the world twice over. It’s a message that consumers around the world are taking to heart. From reusable bags to paper straws, and bottle-free toiletries to meat-free diets, people are taking real steps to reduce waste, and they expect the businesses they buy from to do the same.

In the UK, for instance, grocers have encouragingly pledged to halve their food waste from ‘farm to fork’ by 2030. Whilst we commend large retailers for deploying innovative ideas such as the introduction of ‘wonky veg’ - vegetables that do not meet the aesthetic requirements of supermarkets due to shape or appearance – are now being sold in supermarkets to help combat waste, it is analysing the production of waste on a more granular level that will achieve a positive environmental impact at a far greater scale and have more effect. 

Yet, recent research from Sapio, on behalf of Zetes, reveals that the current levels of supply chain visibility are far from perfect, with a staggering 94% of organisations surveyed saying they lack transparency throughout their supply chain.

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Unlock Capability

To implement an appropriate resolution, it is imperative that the cause of waste is understood. There are so many contributors – from the excess inventory that arises from poor and/or delayed forecasting and orders, to time lost during the distribution process coupled with inefficient transportation models can be devastating for any short shelf-life products. Just 30% of organisations have full visibility of goods in transit. As a result, addressing the food waste that occurs at every stage of the supply chain is a complex task.

Research highlights that 79% believe that improved visibility would have a material effect on cutting wastage. As a taste of the potential savings, it’s estimated that supply chains could reduce food waste alone by €240bn.

For example, reducing empty miles, improving first time in full delivery, minimising unnecessary stock movement between stores, avoiding forecasting or ordering disputes and achieving far more intelligent routing, are all critical components for an efficient supply chain that minimises waste.

Real-time efficiency

Having complete visibility and traceability of products is also key to a resilient supply chain, which is especially important when recalls and faults in production can cause crisis situations and disruptions. When retailers are able to share data throughout their supplier ecosystem in real time, they can create the foundations for better collaboration based on stronger connections and highly effective dynamic forecasting.

It is also essential that companies understand how technology can be deployed and utilised to address each challenge – whether that is waste reduction through improved transportation or more accurate and dynamic levels of stock availability.

So, where to start?    

Environmental consciousness in the digital age will continue to have a huge impact on retailers. The vision to transform ‘farm to fork’ and remove food waste from the supply chain is big. To succeed, retailers need to start small, identifying priority areas first, where quick and impactful wins can be realised. As they start to see results, they will be able to scale fast and ultimately achieve full end-to-end intelligence-driven visibility.

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Zetes’ Supply Chain Visibility Research Report surveyed 451 respondents in the UK, France, Germany and Spain. All interviews were conducted in December 2018 and January 2019

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