Globalisation has meant sourcing from further afield (often the other side of the world). Yet there is growing consumer conscience, and more awareness of green issues thanks to the immediacy of the Internet. All this combines into increased supply chain risk. “Greening” the supply chain is a control mechanism which can help protect all parties in the chain from adverse brand and reputational attack, whilst contributing to the bottom line of supplier and buyer alike.

Up to 90% of a business’ carbon footprint derives from its supply chain. Therefore, applying quantitative performance targets - such as a 10% reduction of the carbon footprint of bought-in product/semi-finished goods/raw material over the next 12 months - can have a dramatic effect on the bottom line. However, if a supplier is already at or near best practice in terms of carbon footprint management, it would be unfair and unrealistic to impose a 10% improvement objective, so there needs to be a mechanism to fairly distribute the targets. Meanwhile this all has to be policed and reported on. Technology tools as well as management commitment are required here - after all, if you can’t measure it, you can’t manage it - where have we been, where are we now, where do we want to be, how do we get there?

Carbon reduction/greening the supply chain is good for the companies in the supply chain, good for the purchasing company, good for UK plc, and good for the planet!

Some points for consideration:-

 ISO 14001 is an environmental management standard imposed more and more on suppliers by such as local authorities, government departments and many large commercial organisations. In turn, suppliers are tending to pass on 14k certification as a requirement to their suppliers.

 Supply chain greening is often integrated with compliance with other risk areas in self-assessment forms, and/or assessed by internal or external audit teams e.g. health & safety, social/ethical, business continuity.

 The larger the supply chain, the more complexity. Responsibility in the public’s perception goes beyond first-tier suppliers all the way down to raw materials suppliers. Images on the 6 o’clock news of filthy chemical effluent pouring into a stream can be potentially disastrous to the brand, reputation and share value of a manufacturer – whatever protective contracts they have with their tier 1 suppliers.

 Legal compliance – increasing costs of non-conformances/corrective actions, fines/penalties, danger to brand and reputation, lack of confidence by investors, employees, suppliers.

 Performance benchmarking – internal and external.

 Reduction in energy use in the supply chain, GHG emissions improvements in the supply chain, trading carbon equivalents etc. all require data collation, analysis and reporting - data submission requirements to UK government as part of the Climate Change Agreement scheme, participation in the EU Emissions Trading Scheme, plus the UK government’s new CRC initiative.

All businesses simply have to do something about greening their supply chain – just how far will you go? How quickly? What software tools are available to help? What is the ROI argument and project payback period – a powerful business case must be presented to and accepted by the board, and then consistently driven through the supply chain.