Climate and Supply Chain - What Should You Do Differently?

As a long time supply chain practitioner, I am bombarded with the programs to deal with ESG and Sustainability to "improve" how we influence the environment. And the narrative is that we are generally making our environment less healthy. What should we, as business leaders, do with this information?

Some say that humans are causing a major shift in climate, making the planet less OK by increasing the CO2 output, driving up temps around the globe. The data seems to refute this. https://bit.ly/45TY2qP

Others talk about having a higher ESG score which theoretically provides better access to funding and new business opportunities as reward for "good behavior" as a corporation. Greenwashing remains a large concern in this arena aiming at a score instead of results. At the same time, the data (on climate) suggests we might be lemmings running to the cliff without really understanding what in fact IS happening, and what we should do from a business perspective.

I support Sustainability in it's basic context. Implementing good corporate practices to be a steward of our planet and our human population is necessary and good. AND, as business leaders, we should aim at results, not just looking GREEN, because it is good for business when we reduce waste. That makes us more competitive and more profitable.

Comparing climate and personal transportation, one of our biggest factors, current data shows EV's are only roughly comparable to ICEs depending on what your source of charging is. In many cases it is worse for EV, especially for the first years/distance driven. In others, it favoring EVs. When you consider birth to death of the supply chain for autos there are conflicting sources for objective data. Carbon output to produce a battery is clearly far larger than the equivalent ICE car. But, carbon output per mile driven is often lower with EV over time, depending on the source of your electricity. In USA, we are largely still carbon based supply. And since we in USA should not compare ourselves to Norway, a majority of electricity from hydro, we need to be realistic. It's still from CARBON. https://climate.mit.edu/ask-mit/are-electric-vehicles-definitely-better-climate-gas-powered-cars. For another contrasting view, see this source; https://www.reuters.com/business/autos-transportation/when-do-electric-vehicles-become-cleaner-than-gasoline-cars-2021-06-29/

And one more for comparison; https://www.allego.eu/blog/2019/october/circular-thinking-carbon-footprint

SO - what should we be considering for our supply chains? It's more productive to avoid the controversy on climate change, and focus on reducing risk, reducing potential for disruption, reducing waste generally. And this has ALWAYS been the challenge.

Shorten your supply chain. Lean your supply chain. Focus on improved quality at the source, and higher reliability. Plan for higher resiliency, with smart sourcing strategies. This can be hard to do when the goal is locked onto quarterly results which means we need to instead plan by numbers for long term relationships, where to focus and how. Plan for the long term. Consider learning more about sustainability for your organization. See our new program from ACSM; Building a Sustainable Supply Chain: Best Practices and Solutions. https://www.ascm.org/corporate-solutions/enterprise/

If you like what you see, drop me a note to explore your options.

And recognize that ICEs will probably go away within 50 years but change is sometimes slow, and we need to adapt smartly.

Bob Forshay, Supplychainpro2know