15 March 2007
Businesses are finding the issue of carbon neutrality increasingly difficult to ignore. Antony Barton looks at how it is moving up the procurement agenda
It's hard to predict the profession's attitudes towards carbon neutral supply chains.
As reported on page 7, all but one of 47 Department for Environment, Food and Rural Affairs (Defra) suppliers last month voted to work with the government department to cut carbon in their supply chains. Yet, at the TiVA Directors
Forum in the same week, 15 heads of procurement voted against a discussion of the subject.
After the forum, Rick Kelsey, group purchasing manager for Associated Newspapers, agreed to work with supplier management firm TiVA to develop carbon footprints for all his suppliers. But he admits that carbon neutrality isn't his company's overriding concern.
"I don't think it's at the top of the agenda for most companies and, to a degree, it isn't with us. Our electricity bills have gone through the roof over the past year, so we're looking at ways to save energy. We intend to reduce our carbon footprint and this dovetails in with that objective."
So are profits and targets more effective incentives than global warming for a reduction in emissions?
David Rabey, director of purchasing and supply at Defra, says shareholder value and reputations are also important drivers for carbon neutrality. The carbon neutral announcement by M&S and Tesco in rapid succession, with a similar pledge from Wal-Mart are, he says, examples of image importance.
Nevertheless, Rabey insists incentives can be interdependent: "The debate between sustainability and efficiency is a sterile one - the two things are compatible, provided people understand their supply chains and where to cut carbon usage."
Nigel Turner, director of public sector account management UK at Carlson Wagonlit Travel, agrees. He was one of the 46 to pledge support at the Defra conference, even though many of his suppliers are airlines. "It's not easy but it'll force us to work more effectively with our suppliers. Unlike quality initiatives, emission reductions must save money in the long run."
CIPS can provide advice for members that find difficulty in moving towards carbon neutrality. It is also developing guidance material on carbon footprints.
The Carbon Trust has published a report to help businesses determine carbon footprints (News, 30 November 2006).
Whether or not organisations choose to accept the help offered, the growing scarcity of raw materials and the political momentum will eventually force many companies to 'green up their act'.
The development of new risk management techniques for carbon neutral supply chains should also sharpen procurement skills.
Rabey believes that as carbon neutrality becomes a board-level issue, it will provide procurement with a visible corporate role.
"If procurement declines the opportunities this issue provides then it will no longer be regarded as an important profession," he adds. "I'm disappointed so many CPOs think carbon neutrality is a fad for the 'hemp and sandals' brigade. It's a worldwide issue that is increasing in importance."