If you want to see ambitious logistics sustainability goals, look no further than large corporate supply chains. Corporations as relentlessly price-conscious as Walmart are targeting 100% renewable energy usage and zero operational emissions in the coming years, making it a goal to “work with suppliers to avoid 1 gigaton of greenhouse gas emissions” by 2030.
While these types of supply chain sustainability targets are goals, not legally binding contracts, companies who wish to do business with large corporations should be proactively considering where they fit in a more climate-conscious world. If you’re a supplier, eventually the goals of the companies you do business with become your goals too, like it or not.
Indeed, when Walmart says jump, suppliers can often only ask how high. Talking to GreenBiz, supply chain consultant Simon Geal notes, “Walmart can take an industry-leading position and can encourage suppliers but also helps suppliers because of its scale, and suppliers are committed to do that.”
Why sustainability initiatives require a supply chain rethink
If you’re already taking some steps towards sustainability, perhaps through in-office recycling or energy-efficient lighting, why focus so much attention on the supply chain? According to McKinsey, for a typical consumer-goods company, the supply chain represents the bulk of greenhouse gas emissions and more than 90% of overall environmental impact. If consumers are pressuring companies to embrace sustainability (and the data suggests they are), there’s only so many places businesses can look to for improvements. The focus quickly lands on supply chain sustainability.
Sustainably packing for the road ahead
Before your products even hit the road, you have a significant opportunity to demonstrate sustainable thinking. Consumers may rarely see your 3PL solutions in action, but they will form opinions on your business based on your packaging choices.
Most obviously, single use plastics are a red flag to some consumers, with 75% of respondents to a poll released by the United Nations wanting single use plastics banned, and 82% favoring products with less plastic packaging.
As consumers demand less wasteful packaging, regulators are beginning to respond. For now, plastic shopping bags are regulated in eight states and many more local municipalities. Packaging traveling through the supply chain may present more of a moving target, but can’t expect to evade scrutiny indefinitely.
While yet to demonstrate anything like Walmart’s commitment to sustainability, that other big box giant, Costco, is moving away from plastic clamshells in produce. Seeking sustainability can be a complicated dance, given that plastics may reduce food waste. But the optics around plastic packaging are not good, and consumers want to see progress in areas that are visible to them.
Shareholder action around supply chain emissions
In addition to consumer sentiment around packaging, and the possibility of future regulation, at the beginning of 2022, Costco had to contend with a shareholder resolution on greenhouse gas emissions brought to the table by mutual fund firm Green Century Capital Management. The resolution passed by a landslide 70% vote in favor, requiring reporting and action over emissions throughout Costco’s full value chain, which inevitably includes supply chain logistics.
Big businesses who aren’t proactive about their sustainability commitments may expect to see more activist shareholder action in the future. Inevitably, suppliers will experience the trickle down effect of those actions over time. The question those suppliers may be asking is whether to wait for their key clients to enact sustainability standards, or get out in front of the issue before competitors do.
Making your supply chain carbon neutral
If packaging is the visible tip of the sustainability iceberg, the logistics of moving raw materials and product inventory represent a challenge that’s both problematic and addressable.
As a company committed to approaching “logistics with logic”, and applying a methodology of continuous improvement to supply chain challenges, we embrace the opportunity that sustainability offers. We recognize that some companies will choose to be leaders on environmental issues, others fast followers, but all can benefit from proactive, forward thinking logistics partners.
Carbon offsetting via carbon neutral shipping provides our customers with the ability to reduce or negate the carbon footprint of their supply chain via investment in carbon emission offset initiatives. We do so via Dot Neutral, a carbon offset automation business specializing in shipping. Using factors like weight, mileage and type of vehicle used to execute deliveries, we can calculate the carbon offset required to make any shipping carbon neutral.
While offsetting carbon may seem a little abstract at first glance, using Dot Neutral lets our clients see exactly where they can have an impact. Our offset program helps fund Bethel Wind Farm in Texas, creating clean energy to offset the carbon footprint of businesses who opt to factor carbon offsets into their supply chain.
The supply chain represents the biggest sustainability challenge for most businesses, and is likely to come under increasing scrutiny over time. The good news is that when it comes to carbon offsets, your logistics partner can do the heavy lifting. In the future, we may see more packaging innovation and a shift towards low-emission electric vehicles. But offsetting emissions is a significant step in the right direction, and one businesses can take today.