The Energy-Efficient Supply Chain

In one of the most hopeful articles I have read recently about how to combat global warming, Peter Parry, Joseph Martha, and Georgina Grenon highlight ways in which energy consumption and carbon output can be reduced in the industrial supply chain that "encompasses the sourcing, manufacturing, transportation, commercialization, distribution, consumption, and disposal of goods, from the ore mine to the trash can." According to the article, there are four primary factors that "drive businesses' interest in the energy-efficient supply chain. First is the desire to cut energy costs. Second is concern about regulation--through trading permits, mandated caps, and other means, governments will increasingly press businesses to limit the amount of carbon they release. Third, a growing segment of customers favor companies that credibly demonstrate reduction of carbon impact. The fourth driver is productivity: The economies that a company like Wal-Mart or Tesco puts in place to reduce emissions can reduce other costs and improve operations as well."

Say what you want about retail giants like Wal-Mart and Tesco, it's a fair bet that they aren't going away anytime soon. So it's exciting to hear that, "On January 18, 2007, Tesco CEO Terry Leahy announced that the retail chain would reduce the carbon footprint of all stores and distribution centers by 50 percent over the next 15 years." This kind of environmental awareness and corporate role modeling is key to combating the global climate change that threatens the well being of the planet.

Businesses that want to follow this lead can access a report by the Carbon Trust, an independent company funded by the British Government "to help the UK move to a low carbon economy by helping business and the public sector reduce carbon emissions now and capture the commercial opportunities of low carbon technologies." The report contains a "business tool for carbon management across the supply chain," that helps to, "demonstrate the practical value that can be gained by business from supply chain analysis--both financial and environmental." The methodology builds "the carbon footprint of different products by analysing the carbon emissions generated by energy use across the supply chain."

So, what does this have to do with donors? Plenty. Many donors are the owners of businesses who can start now to think about how to reduce their carbon footprint, and to set an example for other businesses in their own supply chains for how to run a more ecologically-friendly enterprise. And then donors can take the extra profits they will reap as an added benefit of these changes and plow those dollars back into their communities. The time to lead is now.

Caroline Heine

Posted at 1:00 AM, Aug 21, 2007 in Cross-Sectoral Strategies | Environment | Permalink | Comment