The First Steps Toward a Carbon-Neutral Future
According to the EPA, the supply chain accounts for more than 90% of businesses’ greenhouse gas (GHG) emissions. This may come as a surprise to you, but after all, supply chains are the legs of most companies across the nation and around the world. Businesses rely on supply chain companies for sourcing, distribution, and delivery.
Therefore, it is not a surprise that supply chain companies, along with their clients, want to create a more sustainable and carbon-neutral supply chain. Doing so would cut out a large chunk of our nation’s emissions.
While some supply chain executives and managers may see this as a challenge to overcome, others see it as an opportunity. A carbon-neutral supply chain is one that is less reliant on one of its biggest cost factors: fuel. Although taking steps towards developing supply chain sustainability and aiming for carbon neutrality requires change and investment in new equipment and technologies, the long-term savings could be substantial.
We recognize that you can’t make this change overnight. It is an ongoing process that will take many years to reach, but the supply chain companies that are starting to take action now may be a few steps ahead in the future as clients, along with consumers, look for more sustainable options for their supply chains. In this blog post, we will discuss the first steps toward achieving a carbon-neutral future.
Enhance Emissions Visibility
The first step to take when looking to reduce emissions and become more sustainable is to ensure you have visibility into your footprint. Consistent and reliable visibility allows you to track your carbon emissions and receive data on how much you are producing and where. Data in hand, you can take appropriate action to reduce them or offset them accordingly, while reporting to stakeholders or consumers with a vested interest.
For example, at Redwood Logistics, we offer Redwood Hyperion. Our solution automates detailed load-by-load emissions calculations using best-in-class standards, supports your carbon-neutral shipping initiative with easy access to verified carbon credits, and provides sustainability reporting.
For visibility to be successful, it must be included in every facet of the supply chain. Most organizations start with their Scope 1 (direct) and Scope 2 (indirect purchased energy) emissions, though evaluating emissions across your entire supply chain including Scope 3 (which includes upstream and downstream transportation) is not only critical to understanding your total impact but also a great way to open up opportunities for measurable reductions.
Prioritize Renewable Energy
Renewable energy has become the forerunner of much of the environmental movement. Renewable energy, like solar power, allows households and businesses to become more energy-independent at a lower cost, while also reducing their carbon emissions. As we discussed, achieving carbon neutrality is a long process, so it’s only realistic to start out slow. For example, it is unrealistic to completely convert your facilities to renewable energy all at once; instead, many companies take a long-term and staggered approach to phase in renewable energy sources to reduce traditional grid energy.
Investing in renewable energy comes with an expensive price tag, though it leads to long-term savings. It’s worth noting that with the passing of the Inflation Reduction Act (IRA) there’s even greater federal benefits to solar energy investments that can be stacked on state benefits (depending on your location) and the inherent benefit of reduced electric bills. With energy costs increasing, and the average ROI timeline of 7 to 10 years decreasing thanks to government credits, there’s no better time to start than now.
You can begin by looking at solar farms near your facilities or installing solar panels on-site. This could potentially be placed either on the roof of your facilities or in unused spaces around your property.
The supply chain and logistics industry continues to explore alternatives to diesel, internal combustion trucks. Whether battery-electric, hydrogen fuel, or other alternative fuels, partner with providers that keep sustainability at the forefront and are looking into equipment that is more eco-friendly.
Reduce Materials Impact
Focusing on the supplier and material components of supply chain management provide a variety of ways to reduce carbon emissions while improving ecological conditions. Choosing suppliers who are sustainability-minded, developing products with sustainable materials, and using recyclable packaging are all ways that material waste can be reduced.
The suppliers you choose to work with will have a foundational effect on your supply chain cost and resilience – this is also imperative to sustainability. Sustainability-led product development will allow you to choose less impactful materials to include in your products, evaluate your suppliers’ environmental impact, and leave an overall smaller footprint all in line with your strategic objectives. One way to evaluate your suppliers’ impact is through ESG assessments like EcoVadis, which will inform you on all environmental, social, and governance risks of your supply chain.
Another prominent way of reducing material impact is to evaluate and find innovative ways to reduce packaging. In fact, California has already introduced legislation to reduce plastic waste from packaging. We can expect more legislation like this as state governments take more action toward combatting emissions. An effective way to reduce plastic waste in packaging is by using more reusable, recyclable, and compostable Reusable Transport Packaging. This, of course, alongside finding ways to reduce packaging overall could be an innovative way to reduce impact and potentially cut down on costs.
Our modern world recognizes the importance of environmental awareness as part of a broader emphasis on Environmental, Social and Governance (ESG) practices, and reducing emissions to combat climate change is a big part of that. In fact, this is evident through a growing demand for more sustainable and low-impact businesses. While zero emissions may not be a tangible goal in the short term – it is feasible in the long run – and necessary for our planet.
Supply chain sustainability is important because of moral issues regarding the state of the environment and humankind. Increasingly, consumers and clients want to use sustainable options to source, distribute, and deliver their goods and services. This means that even taking small steps toward becoming carbon-neutral will likely attract more clients while creating greater resilience and reducing spend.
Learn more about Redwood’s sustainability program and how it can help you on the path to a more carbon-neutral future.