Procurement has a vital role to play in influencing supply chains to reduce carbon footprints, the managing director of The Carbon Trust has said.
Speaking at an event organised by consultancy State of Flux, The Carbon Trust’s managing director, advisory, Hugh Jones said that the majority of a business’s environmental impact was not in its direct operations.
“On average, across all industries, the climate impacts are far greater outside of the walls of your business than they are within,” he said.
Between 60 and 95% of a business’s environmental impacts come “downstream or upstream”, from the supply chain or customers using the business’s products, Jones added.
“Only 5-40% come from your own operations,” he said. “Procurement holds the key to the majority of impacts. It has a vital role to influence the supply chain, in your own operations and the distribution of your products and services.”
In the short term, Jones said this could translate into getting suppliers to be more cost effective and efficient, while in the long term it relates to risk around climate change: “It’s making your supply chain more resilient and sustainable in the far reaching sense.”
“Whatever sector you are in, you need to think through the whole lifecycle of what you are doing,” he added.
Jones cited the example of Carlsberg, which has worked with The Carbon Trust to set science-based targets, including a target of 0% carbon emissions at its breweries and a 30% reduction in its “beer-in-hand” carbon footprint by 2030.
Some 40% of Carlsberg’s carbon footprint comes through its packaging operations. The company is partnering with 30 suppliers to reduce its shared carbon footprint.
“It’s all about an informed view of the impact of your value chain, that’s a lot more involved than your electricity bills,” Jones said.
He also shared examples of The Carbon Trust’s work with Heathrow Airport and O2. Heathrow has committed to using 100% renewable energy and providing energy efficiency support to tier one suppliers by 2020.
O2 has put in contractual arrangements around environmental impact with its suppliers for contracts over £1m. These suppliers must commit to the delivery of emission reduction programmes, the performance of which is regularly reviewed.
The reaction of businesses to the problem of climate change had been really positive overall, Jones said.
“Climate change is the single most important sustainability issue,” he added. “Corporates are stepping in and going beyond policymakers. They are leading the way.”
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