Environmental issues have been expanding and spreading quicker than forest fires from country to region, region to global level territory in recent decades, which is a major contributor to climate change and global warming. Furthermore, natural resource scarcity and air and water pollution have a negative impact on fauna and flora, as well as human health, resulting in diseases such as ischaemic heart disease, lung cancer, chronic obstructive pulmonary disease, stroke, Dracunculiasis, Cholera, Hepatitis, Typhoid fever, and Norovirus. The green supply chain idea is used to reduce environmental deterioration and pollution of air, water, and waste by incorporating green practises into company operations.
Although the underlying premise of the green concept is undeniably to improve environmental sustainability, businesses often use the green concept to “kill two adversaries with one bullet.” Because a green supply chain can reduce pollution and production costs while also spurring economic growth, creating a competitive advantage in terms of higher customer satisfaction, a positive image and reputation, and allowing companies to export their products to countries that are environmentally friendly. Corporate social responsibility, green manufacturing, waste reduction, recycling, and remanufacturing sustainable/environmental friendly supply chain, green supply chain, and so on are all examples of green ideas that are expanding with new innovations and techniques to protect environmental sustainability.
The idea of incorporating sustainable environmental processes within the traditional supply chain is referred to as a sustainable or green supply chain. Processes like as supplier selection and material procurement, product design, product production and assembly, distribution, and end-of-life management are all examples of this. Rather than reducing the negative impact of business and supply chain activities, a green supply chain adds value and/or creates value throughout the entire chain. Green supply chains undeniably reduce air, water, and waste pollution, but green operations also improve enterprises’ performance in terms of less waste manufacturing, reuse and recycling of products, cost savings, asset efficiency, positive image development, and increased customer satisfaction. As an example, Figure 1 depicts a green supply chain for a child’s crib manufacturer.
Green practices in supply chain management
Companies increase their productivity and environmental growth by using several green practises in their company and supply chain activities. The following are some well-known green practises:
3.1 Green material sourcing
Green sourcing refers to the acquisition of materials and components that have enviable ecofriendly properties such as reusability, recyclability, and the absence of toxic or dangerous compounds. Procurement experts have been driven to evaluate their existing sourcing, purchasing strategy, and impact on environmental sustainability as environmental concerns have grown. Recycling and remanufacturing play a role in environmentally conscious shopping. Green sourcing, according to Min and Galle, promotes waste reduction by enhancing recycling, remanufacturing, and other supply chain activities. Carter and Rogers conducted a study to see how green sourcing affects a company’s environmental and financial success.
They came to the conclusion that by successfully implementing a green purchasing strategy, product costs are reduced, and firms’ environmental and financial performance improves, as well as their market reputation. According to Zailani et al., environmentally conscious purchasing has a positive impact on a company’s operational and environmental performance. Design operation management, supply chain management, environmental authentication, ecology, and external environmental management were the five primary features of green purchasing identified by Yang et al. They confirmed that green purchasing boosted the overall performance of the companies. Green purchasing in the supply chain and corporate operations is a proven method for reducing waste, air pollution, and water pollution.
3.2 Green marketing
Green marketing, a broad range of marketing activities (e.g., planning, production, process, price, promotion, and after-sale service) aimed to highlight the goal of an organisation to lessen the detrimental consequences of their products, is directed towards all corporations and consumers. Green marketing encourages people to buy things that are good for the environment. It includes activities that can satisfy human aspirations while having the least amount of harmful impact on the environment’s beauty. Green marketing also improves a company’s competitiveness, financial and environmental performance, as well as its reputation and image.
3.3 Green management
Green management practises (GMP) provide a company with additional sources of data that can help them achieve their economic and environmental goals. Adoption of green management methods benefits a company’s image, efficiency, environmental compliance, cost savings, societal commitment, and carbon emissions reduction, among other things.
3.4 Green distribution and warehousing
Green distribution and warehousing may decrease waste and play a major part in energy conservation. The value addition of green products in warehousing can considerably improve overall performance and improve company image. Green distribution aids businesses in achieving greater financial and environmental results.
3.5 Green manufacturing
Green manufacturing techniques aim to implement socially and ecologically responsible practises in order to reduce the negative consequences of manufacturing while also increasing business profitability. Production processes are more efficient when green techniques are used. This approach entails the use of green resources, which can help businesses gain a competitive advantage by lowering product costs and improving product quality. Both the lean and green manufacturing industries strive to reduce waste and increase the efficiency of manufacturing operations. The advantages of green manufacturing, according to Baines et al., are that green practises in production processes mitigate the negative effects of manufacturing processes on environmental sustainability, and green manufacturing improves a company’s operational, environmental, and financial performance.
3.6 Ecological design
According to Luthra et al., the use of ecological design in supply chain management can control 80 percent of environmental consequences from product and process related issues. Many ideas, such as using cleaner technology processes, green raw materials, and components, are incorporated into ecological design. Green product design decreases a product’s environmental impact over its lifetime. Furthermore, green product design encourages reuse, recycling, and remanufacturing, which not only helps businesses improve their environmental performance but also allows them to save money.
3.7 Green transportation and reverse logistics
Green transportation and reverse logistics practises give businesses the chance to improve their image while lowering costs. Logistics costs can be reduced by improving the efficiency of transportation systems, and customer relationships can be improved to increase profitability. The activity of reverse logistics (reusing, recycling, and remanufacturing), which can produce products that can be used again for clients, is one of the logistics activities combined with rehabilitation. Green logistics enables businesses to reduce their environmental impact while improving quality and lowering costs.
3.8 Renewable energy and biofuels
Without a doubt, global logistical and supply chain operations rely heavily on energy and fossil fuels, which are the primary contributors to climate change, global warming, and pollution due to increased carbon and greenhouse gas emissions. In order to achieve sustainable environmental and economic growth, supply chain operations must use renewable energy and biofuels. Logistics-related activities, according to Anable et al., use more energy to complete their tasks. Renewable energy and biofuels boost business performance while also lowering carbon emissions. Furthermore, fossil fuels are more costly than biofuels and renewable energy sources. Government regulations, together with customer knowledge, put pressure on businesses to adopt biofuels and environmentally friendly energy in their supply chains. Bioenergy reduces carbon emissions while simultaneously improving the profitability of businesses through improved image and reputation.
The most significant aspect for enterprises to integrate green practises in their supply chain operations is cost minimization. The utilisation of reused, recycled, and remanufactured items would help to reduce the prices of packaging, components, and materials if green supply chain activities were implemented. Green practises, according to Khan et al., provide opportunities to capture new markets and export to environmentally friendly countries, whereas polluted firms are unable to export their products to environmentally friendly countries such as the United States, Germany, the United Kingdom, and Poland. Green supply chain management strategies have undeniably been a tool for businesses to reduce product costs, increase profitability, and expand market share. Firms, on the other hand, use green techniques in their corporate activities to improve social performance. Improvement in people’s quality of life without sacrificing environmental beauty is referred to as social performance. Furthermore, social performance encompasses the promotion of a company’s image as well as the enhancement of environmental sustainability and the reduction of environmental dangers.
Firms can improve their operational performance by implementing GSCM methods, such as enhancing product quality and improving delivery service. Green supply chain management initiatives also assist organisations in improving their environmental performance by reducing carbon emissions, eliminating waste from the end-to-end supply chain, and promoting reuse, recycling, and remanufacturing through effective and strong collaboration with suppliers. Integrating an environmental management system (EMS) into a company’s production plan will help the company improve its environmental performance.
Supply chains are turning to green solutions for the future
Carriers are investing in greener delivery solutions as a result of growing environmental concerns and pressure from the public and regulators…
Climate change has become such a persistent threat to our society and economy that corporations are scrambling to find ways to assist in the greening effort. As shippers set sustainability objectives, Scope 3 emissions, which are the result of indirect emissions that occur throughout a company’s value chain, have gotten a lot of attention. The extended supply chain is frequently the largest source of emissions while also being the most difficult to address.
A recent 2020 report from CPD explored the state of environmental risks in supply chains and what approaches businesses are taking to mitigate them. It found that just “37 per cent of suppliers are taking action and engaging with their own suppliers, down from 39 per cent in 2019.”
More than 1,000 companies are now trying to cut scope 3 emissions, according to CDP, and 94% of organisations with science-based objectives give specifics on how they plan to do so.
FedEx declared that by 2040, it would have converted its entire parcel pickup and delivery operation to “zero-emission electric vehicles.” FedEx CEO Fred Smith attributed the decision to the growing economic viability of sustainable solutions as well as concerns about carbon pollution.
“Our customers are increasingly focused on this issue. They want to do business with transportation providers that are environmentally responsible,” Smith said. “But we also — as a commercial enterprise — have to produce for our shareowners.”
DPD group has announced its intention to provide zero- and low-emission delivery options to 225 of Europe’s major cities. By 2025, DPD group will have reduced its last-mile carbon footprint in the cities targeted by 89 percent and pollutants by 80 percent, compared to 2020. CO2 emissions per parcel have decreased by -14 percent since 2013, and by 2025, they will have decreased by -30 percent.
Carriers across the supply chain are investing in green technologies and numerous approaches to help cut emissions and promote sustainability, from the ocean to the air, the road, and the rail.
The International Maritime Organization’s sulphur restrictions, known as IMO 2020, went into effect last year, limiting sulphur emissions from ships to 0.5 percent mass by mass, down from 3.5 percent previously.
Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group, a global leader in shipping and logistics, announced earlier this year that six LNG (liquefied natural gas) powered containerships would be dedicated to the US market as part of the Group’s ongoing efforts to improve air quality and accelerate the shipping industry’s energy transition.
The carrier’s statistics on LNG are positive: 99 percent less sulphur dioxide, 91 percent less particulate matter, 92 percent less nitrogen oxide, and 20 percent less CO2 than traditional fuels, according to the carrier.
Aviation emissions are a substantial contributor to climate change, and using sustainable aviation fuels is one approach to reduce them.
The owner of British Airways has become the first European airline group to pledge to using sustainable jet fuel on 10% of its flights by 2030. IAG said that it will purchase a million tonnes of sustainable aviation fuel every year, allowing it to reduce yearly carbon emissions by two million tonnes by the end of the decade.
In addition, the firm declared that it is the first airline group in the world to extend its net-zero commitment to its supply chain.
The process of establishing the most cost-effective route is known as route optimization, and it may be extremely advantageous to trucking and delivery companies. It can assist in giving accurate ETAs and increasing customer satisfaction. Drivers spend less time travelling on well-planned routes, which saves fuel costs and wear and strain on cars while also increasing time on-site and the number of stops a driver may make in a day. Route optimization can also assist reduce operational costs.
The trucking sector recognises that the supply chain is shifting toward a more sustainable future, which means diesel vehicle alternatives will become available. The most talked-about alternatives are battery-electric vehicles, fuel-cell electric vehicles, and vehicles that run on renewable fuels.
For the first time in the UK, long-distance trains might run on battery power, according to Hitachi Rail. Great Western Railway services between London Paddington and Penzance, Cornwall, might be powered by a mix of batteries, electricity, and fuel, according to the firm. Using battery power at the route’s non-electrified stations will save more than 20% on fuel, improve air quality, and lower noise levels.
Testing is planned to begin in 2022, with Hitachi Rail hoping to build a fully electric intercity train by the late 2040s.
Green supply chains are key to a more sustainable planet
Green practises must be integrated into supply chains to reduce the industry’s environmental effect and promote corporate integrity…
Customers are increasingly concerned about environmental aspects such as waste, resource use, and embedded carbon, therefore the acceleration of online shopping over lockdown has had an impact on the dynamics and sustainability of many organisations’ supply chains.
The environmental consequences of this new style of consuming are a huge problem, thanks to plastic packaging, carbon emissions, and returns that end up in landfills. As a result, corporations are under increasing pressure to build more sustainable supply chains and address these environmental issues.
The environmental cost of online purchasing
According to data from the IMRG Capgemini Online Retail Index, UK online sales increased by 36.6 percent in 2020 compared to 2019, the biggest increase since 2007. However, the enforced rise of eCommerce has had a severe influence on the environment.
Due to an increase in delivery vans last year, the number of vehicles on UK roads surpassed 40 million for the first time, resulting in an increase in carbon emissions. Not to mention the growing use of cardboard and other packing materials, much of which is non-recyclable and destined for the landfill.
Surprisingly, despite the easing of limitations, the eCommerce boom appears to be here to stay, at least according to first public perception. According to research, buyers have received an average of two extra deliveries per month since March 2020, and more than half of the public now expects to order online at the same volume even until the high street reopens in earnest.
The benefits of a greener supply chain
If the rising consumer focus on eCommerce continues, the carbon footprint of enterprises that sell online will be scrutinised much more. Given that the supply chain generates the bulk of emissions, firms might benefit from a stronger emphasis on this area.
Investing in greener practises can have a concrete influence on an organization’s bottom line, in addition to the obvious reputational boost for greener enterprises in the eyes of today’s increasingly environmentally sensitive consumer. Investing in zero-emission vehicles, for example, is likely to save businesses money in the long term because electric vehicles have lower whole-life expenses. Furthermore, data shows that 85 percent of people prefer to buy from businesses that have a good reputation for sustainability.
Building a supply chain that is efficient and environmentally sustainable
Greener corporate practises will only become more important as the UK moves closer to its 2050 goal of net zero emissions. As a result, it is critical that firms examine their supply chains now in order to avert potentially major financial and reputational harm in the future. But what are the first actions that firms may take to create a more environmentally friendly supply chain?
Build internal support
Having the necessary foundations in place, which entails first developing the business case for action, is critical to ensuring that greener supply chain initiatives are adopted long-term. This aids in the development of internal support for greener business practises, the assessment of any potential hazards, and the identification of the places where the supply chain has to be made more environmentally friendly.
Be accountable for all emissions throughout the supply chain
Businesses must be more mindful of all pollutants generated across their supply chain. While reporting on Scope 1 and Scope 2 emissions is required by law, there is currently no legal duty to report on all indirect emissions created across the supply chain, known as Scope 3 emissions.
When you consider that Scope 3 emissions can account for the bulk of a company’s carbon footprint, it’s evident that any company aiming for net-zero emissions can’t possibly fulfil their goals without them.
Organizations that pay more attention to their overall carbon footprint, including Scope 3 emissions, can only be viewed as beneficial, resulting in societal environmental advantages.
Establish a supplier code of conduct
Businesses aiming to implement truly sustainable operations should, whenever possible, engage with suppliers who share their values and ambitions. One of the most successful methods for organisations to involve suppliers in their sustainability initiatives is to establish and communicate expectations through a supplier code of conduct.
Identify inefficiencies in your logistics network
Businesses should also examine their logistics network to see if there are any inefficiencies that may be addressed. Companies should assess their present fleet size, vehicle makeup, and geographic spread, as well as the locations of their distribution centres, to identify any inefficiencies or squandered resources.
Supporting businesses in their sustainability journey
Supply chain sustainability is becoming more widely recognised as an important aspect of overall organisational sustainability. According to HSBC, 31% of firms throughout the world plan to make sustainability-related improvements to their supply chains, and seven of the top ten global FMCG companies have carbo