How Can Supply Chains Become More Sustainable?
In today’s ever-complex logistics landscape, businesses are faced with challenging questions, perhaps none more pressing than, “How can we ensure our customers don’t face delays?”
Amid these challenges, however, lies an opportunity. Far more than just a buzzword, sustainability is becoming more important in the discussion around supply chains. Sustainable practices keep businesses at ease during supply chain bottlenecks and combat climate change in day-to-day operations. They have the potential to shake up the logistics industry as we know it.
Read on to get a closer look at what it could really mean to have a sustainable supply chain, what stands in the way, and how your business can get ahead.
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The Transparency Problem in Logistics
Logistics has a transparency problem, plain and simple. While businesses around the world have begun to implement their own sustainability policies, the partners they rely on to carry out shipping most often don’t follow suit.
Though it’s remained largely in the background of conversations around sustainability, the influence of supply chains is nevertheless substantial. According to estimates from McKinsey, as much as 90% of most companies’ environmental impact comes from their supply chains.
The downstream effects of even a small company’s operations, from production to last mile shipping, span far and wide. To get a holistic view, sustainability-forward companies need to consider raw materials, power sources, recycling, and the human capital it takes to make it all work. And one of the primary challenges for many companies is a simple one: Tracking where your goods are and how they actually make it to the final destination.
The struggle for open cargo data from start to finish affects behemoths and small businesses alike. Recent reports on Amazon’s import data reveal that only about 15% of the company’s ocean shipments could be tracked. It relies heavily on third-party suppliers to meet the demand for fast shipments around the world.
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What is ‘Sustainability,’ Really?
While the terms ‘green’ and ‘sustainability’ often bring to mind only emissions and alternative energy, they in fact take far more into account.
Let’s start by defining a few key terms in the realm of sustainability before diving into how they fit in with supply chains.
Carbon footprint: The total amount of greenhouse emissions from a company or individual.
ESG: An acronym meaning Environmental, Social, and Governance. This is defined by a company and set in place as a principle to guide how business and growth can be attained with sustainability in mind.
Carbon offset programs: A way for entities to reduce their carbon footprint by purchasing ‘credits’ or taking part in restoration programs—for instance, a company may participate in reforestation, environmental education schemes, or ocean cleanups.
Greenwashing: This refers to brands, companies, or organizations who are ‘all talk.’ Greenwashing is a marketing tactic without having the environmentally responsible practices to back it up.
Carbon neutral: A company that is carbon neutral is one that has achieved (or is in the process of achieving) zero net emissions. This is done through purchasing carbon credits and altering practices across the supply chain.
How to Really Make Supply Chains More Sustainable
Companies focused on sustainability and ESG should look at the finer points of every step of the supply chain. That means starting taking stock of their suppliers and providers, in addition to the infrastructure that each use.
Where do a company’s raw materials come from before reaching the production site? How far do workers themselves need to travel, and are their work practices safe and regulated? These complexities—and the time it takes to truly understand them—are part of why greenwashing and ‘surface-level sustainability’ can be so prevalent.
Take warehouses, for example. They’re a component that can have a massive impact on the environment. Within warehouses alone, things like single-use paper and inefficient lighting can have a massive net impact on a company’s carbon footprint. Suffice to say, doing the math and organizing this type of data for every step of the supply chain is no small task.
If businesses want to ensure their supply chains are as green as possible, it’s also crucial that all parties are on the same page You need a trusted partner that prioritizes their environmental impact. So what might that look like in practice?
Moving down the supply chain, logistics providers leading the way in sustainability might:
Strategically place warehouses nearer to consumer bases when possible. Fewer kilometers between fulfillment centers and customers’ doors means a smaller carbon footprint.
Use packing materials made from recycled sources like poly mailers. Poly mailers minimize waste and can be reused or recycled by customers. Additionally, their lightweight nature helps reduce transportation emissions and energy consumption during shipping.
Utilize technology to cut back on their total carbon footprint. Freight transportation alone accounts for 8% of global greenhouse gas emissions. If businesses look to shipping providers that prioritize alternative energy—specifically electric vehicles for ground transport and the last mile—this impact will be reduced.
Use all available assets and have the capability to make changes. This might come from employing a 4PL system, which means providers don’t own assets and instead have the flexibility to adapt. If a 4PL provider finds a greener solution—from ground transport all the way to warehouses.
Choose fulfillment facilities that use up-to-date, efficient cooling, heating, and lighting systems.
Work With a 4PL Provider That Puts Sustainability First
CBIP is proud to be Asia’s first carbon-neutral 4PL provider, and we’ve made sustainability a priority since day one.
In today’s business scene, consumers are taking notice too. Research from MIT indicates that customers are willing to pay more for goods sourced sustainably and from companies whose supply chains are transparent. Don’t get left behind as the tides shift — take action with a logistics partner that has the experience you need to craft a sustainable supply chain.
CBIP offsets 100% of our carbon emissions, allowing you to rest assured knowing that your goods are transported in as clean a manner as possible. We’ve also got a trusted partner network of industry experts around the world paired with comprehensive visibility technology to keep you attuned to the details of your unique supply chain.
For more on our commitment to the environment and to view the details of our carbon offset program, check out our sustainability policy.
Is your business ready to do its part to protect the planet for the next generation and scale up sustainably? Drop us a line and schedule a chat with one of our experts today.