Tag Archive | Supply Chain Sustainability

How to Eliminate Deforestation From Supply Chains

Supply chains have a decisive influence on global deforestation, a phenomenon closely related to the climate and biodiversity crises. Therefore, guidance is needed for decision-makers to inform the design, implementation and monitoring of supply-chain initiatives to reduce global deforestation. Lambin et al.’s (2018) article, entitled The Role of Supply-Chain Initiatives in Reducing Deforestation, reviews such initiatives, their effectiveness, and the challenges they might face. The authors propose “a typology of strategies pursued by private sector actors to reduce deforestation”. This typology is based on two questions: “Was the strategy adopted independently by a single company or as part of a multi-stakeholder process?” and “Does the initiative only define and communicate goals, or does it also implement actionable changes?” This leads to four supply-chain initiatives: (1) company pledges, (2) codes of conduct, (3) collective aspirations, and (4) sectoral standards. In sum, the article gives a very good overview of key initiatives that could help us to solve one of the most important problems of our time.

Lambin, E.F., Gibbs, H.K., Heilmayr, R. et al. (2018). The Role of Supply-Chain Initiatives in Reducing Deforestation. Nature Climate Change, 8, 109–116. https://doi.org/10.1038/s41558-017-0061-1

Webinar: “Supply Chain Transformation for a Sustainable Future”, September 8, 2021

How can innovation and new business models transform global supply chains in the transition to a sustainable economy? On September 8, I look forward to joining Juliane Reinecke (King’s College London), together with our speakers from Anglo American and the World Economic Forum, to discuss this topic in a webinar on Supply Chain Transformation for a Sustainable Future. Please register at: https://cbs.nemtilmeld.dk/300/

Why Is the SCM Discipline So Silent About the Climate Crisis?

The Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) was released today. Bringing together the latest advances in climate science, it addresses the most updated physical understanding of the climate system. Even without this new IPCC report, it should be clear that our planet is in an existential crisis: The scale and intensity of the recent floods in Germany have broken all records and the ongoing fires in Greece have reached biblical proportions; Greek Prime Minister Kyriakos Mitsotakis said these fires showed “the reality of climate change”. Devastating fires are also raging in Russia, Italy, Turkey, and various other places. Attribution studies show that the recent record-breaking heatwaves in Siberia and Western North America would have been impossible without man-made climate effects (Ciavarella et al., 2020; Philip et al., 2021). Much of the greenhouse gas emissions are generated in global supply chains. Possible solutions to the climate crisis, thus, include new supply chain structures, processes, and business models. Yet, despite the existential threat to our species from this crisis, our discipline has so far been strangely silent. Therefore, I hope that as many SCM scholars as possible will now read the 42-page Summary for Policymakers of the new IPCC report from cover to cover. Our discipline simply cannot continue to ignore the elephant in the room.

Intergovernmental Panel on Climate Change (2021): Summary for Policymakers. In: Climate Change 2021: the Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change. Geneva, Switzerland. https://www.ipcc.ch/report/ar6/wg1/#SPM

Food Supply Chain Emissions

The importance of food supply chain emissions has increased. According to a study, entitled Food Systems Are Responsible for a Third of Global Anthropogenic GHG Emissions, recently published in Nature Food by Monica Crippa et al. (2021), our food systems emit 34% of the world’s greenhouse gas emissions every year. It turns out that “[t]he largest contribution came from agriculture and land use/land-use change activities (71%), with the remaining were from supply chain activities: retail, transport, consumption, fuel production, waste management, industrial processes and packaging”. What is remarkable about this study is the level of detail and size of the dataset, called EDGAR-FOOD, which identifies the sources of greenhouse gas emissions across the entire food production and supply chain. One of the coauthors argues that “[a]ny policy decision requires a good and robust evidence base”, hoping that “EDGAR-FOOD will be helpful in identifying where action to reduce food system greenhouse gas emissions is most effective”.

Crippa, M., Solazzo, E., Guizzardi, D., Monforti-Ferrario, F., Tubiello, F. N., & Leip, A. (2021). Food Systems Are Responsible for a Third of Global Anthropogenic GHG Emissions. Nature Food, 2, 198–209. https://doi.org/10.1038/s43016-021-00225-9

Net-Zero Challenge: The Supply Chain Opportunity

A new World Economic Forum report, entitled Net-Zero Challenge: The Supply Chain Opportunity and co-authored with Boston Consulting Group, showcases “the opportunity that all companies have for huge climate impact through action to decarbonize global supply chains”. This report argues that addressing supply-chain emissions enables many companies to impact “a volume of emissions several times higher than they could if they were to focus on decarbonizing their own direct operations and power consumption alone”. Among the major findings of the report: (1) Many companies can multiply their climate impact by decarbonizing supply chains; (2) Eight supply chains account for more than 50% of global emissions; (3) Net-zero supply chains would hardly increase end-consumer costs; (4) But: decarbonizing supply chains is hard. The report contains a step-by-step guide, which shows nine major initiatives every company can undertake. These initiatives were identified through interviews with a large number of global companies that, according to the authors, lead the way in reducing supply-chain emissions.

Remaining Carbon Budget

The IPCC defines the world’s remaining carbon budget as the cumulative net global anthropogenic CO2 emissions to the time that emissions reach net zero that would result in limiting global warming to a given level, accounting for the impact of other anthropogenic emissions. In other words, it allows us to calculate how much CO2 can still be released to limit global warming to a maximum of 1.5°C and 2°C, respectively. Currently, emissions equivalent to 42 gigatonnes (Gt) of CO2 are released globally every year. The following MCC Carbon Clock shows that time is ticking very fast and that we urgently would need to decarbonize our global supply chains.

Exciting Times Are Ahead

The whole world can see it clearly. A wind of change is currently blowing through the air and the past eventful weeks have almost turned it into a storm: The IPCC published its Special Report on the Ocean and Cryosphere in a Changing Climate; world leaders at the Climate Action Summit in New York demonstrated growing recognition that the pace of climate action must be rapidly accelerated; climate activist Greta Thunberg received the Right Livelihood Award “for inspiring and amplifying political demands for urgent climate action reflecting scientific facts”; several million people across the globe joined the Global Climate Strike; Germany followed other countries by introducing a carbon price; and the European Investment Bank decided to divest from fossil fuel projects. It is becoming increasingly clear that the fossil era, which has long shaped the global power structure, is coming to an end. While late movers are now desperately trying to conserve the obsolete fossil solutions of the 20th century with the help of trade barriers, those states relying on green technologies are gaining significant influence. The task of our discipline is now to adapt our theories, methods and practices to this new reality. Exciting times are ahead!

Mapping the Cobalt Supply Chain

Cobalt has become a key commodity for battery-powered vehicles and other electronic products. The Democratic Republic of Congo is the largest producer of cobalt. The so-called “Copperbelt” in the southeastern part of the country hosts most of the cobalt ore, mainly extracted through large-scale industrial mining but also through artisanal and small-scale mining activities by more than 100,000 miners. The sector faces numerous sustainability challenges within local supply chains, such as child work and other human rights violations. The Federal Institute of Geosciences and Natural Resources from Germany has now published a report, titled Mapping of the Artisanal Copper-Cobalt Mining Sector in the Provinces of Haut-Katanga and Lualaba in the Democratic Republic of the Congo, which analyzes the cobalt supply chain in the Congo. The focus of the mapping lay on the beginning of the supply chain, i.e. from the cobalt ore to the first domestic sale of production, which is often overlooked by Western consumers and users.

The Worst Supply Chain in the World?

Is Cargill the worst company in the world? In their new report, titled Cargill: The Worst Company In the World, the environmental protection organization Mighty Earth argue that this is actually the case: “[W]hen it comes to addressing the most important problems facing our world, including the destruction of the natural environment, the pollution of our air and water, the warming of the globe, the displacement of Indigenous peoples, child labor, and global poverty, Cargill is not only consistently in last place, but is driving these problems at a scale that dwarfs their closest competitors.” Mighty Earth highlight several problems in Cargill’s supply chains, for example: “It took Cargill months […] to address relatively simple issues in their palm oil supply chain that other companies had dealt with long ago.” and: “Cargill still does not have a comprehensive approach to prevent and address the growing intimidation and violence of human rights defenders that is widely prevalent in its supply chains for palm and other commodities.”