The “No-Excuse” Framework to Accelerate the Path to Net-Zero Manufacturing and Value Chains is a new white paper that aims to provide businesses with the information they need to operationalize their commitments to reducing carbon emissions and addressing the climate crisis. The framework is intended to be a central tool for the World Economic Forum Industry Net Zero Accelerator initiative, which is designed to bring together leaders across industry sectors, academia, government, and civil society to jointly shed light on global insights and best practices for reducing emissions. The framework is divided into four stages: (1) build the foundations, (2) change the game internally, (3) drive systemic collaboration, and (4) make it simple, inclusive and exciting. Each stage of the framework consists of a combination of research-based insights, well-established action areas, and emerging themes. The goal of the framework is to be applicable across key industries and geographies. This white paper is the first output of the Industry Net Zero Accelerator initiative and further resources are available for chief executive officers at the Alliance of CEO Climate Leaders.
As in previous years, I am making a prediction about what could be important topics in supply chain management research. Here are three predictions: (1) OpenAI has demonstrated the incredible potential of machine learning, and this will have numerous implications for the management of supply chains. It is important for our discipline to consider the potential and drawbacks of this technology at an early stage. (2) Supply chain resilience remains a critical issue. For example, the recent resurgence of Covid-19 cases in China could lead to the closure of ports and factories, which would disrupt global supply chains. This topic will continue to be relevant in the future. (3) The climate and biodiversity crises continue to worsen, and their solutions are closely tied to supply chains. Human-caused emissions and the destruction of rainforests are directly related to supply chains, and new laws, such as those in Germany and the EU, reflect this. I wish you all a Happy New Year 2023.
The International Energy Agency has just released a new special report entitled Solar PV Global Supply Chains. It examines solar PV (= photovoltaic) supply chains “from raw materials all the way to the finished product, spanning the five main segments of the manufacturing process: polysilicon, ingots, wafers, cells and modules”. The authors argue that “[p]utting the world on a path to reaching net zero emissions requires solar PV to expand globally on an even greater scale, raising concerns about security of manufacturing supply for achieving such rapid growth rates – but also offering new opportunities for diversification”. It becomes clear from the report that China currently dominates such supply chains and that diversification can reduce supply chain vulnerabilities and offer economic and environmental opportunities. According to the authors, policy makers need to aim for (1) diversifying manufacturing and raw material supplies, (2) de-risking investment, (3) ensuring environmental and social sustainability, (4) continuing to foster innovation, and (5) developing and strengthening recycling capabilities.
The year 2022 has been going on for quite a while. I see the following topics at the top of the agenda in both academia and business: First, the last few months have been characterized by a large number of supply chain hiccups. Missing chips in the automotive industry have become a symbol of this development. Therefore, supply chain resilience is more important than ever. Second, a lot is currently happening in the European Union in terms of supply chain laws. Stricter rules on supply chain liability are expected shortly, and several EU countries have recently pushed their legislation forward. Third, many companies are transforming their linear into circular supply chains, see the new DHL report entitled Delivering on Circularity. Finally, many companies are also concerned with net-zero goals – and more importantly with action plans for these goals. Many of these plans explicitly involve the supply chain. Although I am a bit late, I wish you a good supply chain year 2022.
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
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/
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
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
JSCM talked to me about my new paper, entitled Dancing the Supply Chain: Toward Transformative Supply Chain Management: