NATIONAL REPORT—For many businesses, creating an environmentally friendly supply chain is on the “would be nice” list. And others do not take all the necessary steps. Some businesses just think using eco-friendly packaging supplies is enough, but there’s so much more supply chains can do. The goals have long seemed too abstract, too far off and too difficult to achieve.
Recent statistics reported in an article from Franchise Help say that consumers are increasingly taking notice of the environmental records of the businesses they buy from:
- 55 percent of global consumers are willing to pay more for sustainably produced goods.
- 71 percent of Americans consider the environment as a factor when shopping.
- 88 percent of Americans believe taking care of the Earth is important, but only 52 percent believe it is the government’s responsibility.
That last statistic is key. If consumers do not see the government as responsible for protecting the Earth, the responsibility passes to the corporations they buy from.
How can you start taking the steps to develop a greener supply chain?
- Understand why you do things—and question everything.
The first step to developing the “how” is to understand the “why.” In an interview with the Harvard Business Review, business sustainability expert Peter Senge outlines why the first step in creating a sustainable supply chain is always to examine your organization’s core principles.
In fact, if your core principles are oriented only toward short-term profit, you might not even see why sustainability is important at all. Senge notes: “If [you’re] stuck in the mind-set (so popular in business schools, unfortunately) that a company exists to maximize return on investment capital, with an emphasis on short-term financial performance, [you] won’t get very far.”
Let’s put it this way: with the world staring down the reality of climate change, your future profits absolutely do depend on cultivating sustainability in every aspect of your business. Climate scientist Amir Jina writes in Forbes that even in an optimistic scenario, climate change could take a bite out of the U.S. GDP to the tune of 1 to 4 percent. That spells serious problems for almost every business.
So, if you are working for something other than juicing as much short-term shareholder value as possible, what is it that goal? If you are not sure, take some time to look deeply at your company culture. You might need to ask some hard questions, such as:
- Why does your organization do what it does and not something else?
- What do you see as your company’s mission in the world?
- Where do you see your firm in 10 years—not just in terms of profitability but in terms of the good it has done?
These questions often do not have any easy answers, so it’s OK if you can’t answer them immediately. But to get the company-wide cooperation necessary for real change, you will need a solid idea of where you’re going and why you’re going there.
- Find out who the relevant NGOs are, and use their expertise.
Non-governmental organizations study environmental issues in ways you probably do not consider day to day. If you are serious about improving supply chain sustainability, you’ll need the perspective of an organization whose analysis comes from a non-transactional angle.
If you’re not sure which NGOs are most relevant to your area, Sustainability Degrees has a great list to get you started. Among the most influential and knowledgeable are:
- Ceres: A sustainability nonprofit geared toward helping the business community develop more sustainable practices. Ceres is one of the biggest names in the business, with Fortune 500 companies comprising over a third of their clients.
- World Resources Institute: An outstanding source of information that can help you plan your transition to cleaner practices, the WRI collates data from dozens of environmental groups into actionable insights for business.
- World Wildlife Fund: This NGO helps protect Earth’s wildlife and preserve the priceless ecosystems that allow agriculture to thrive.
Some NGOs also provide endorsements that can help your business with environment-conscious customers. Ask relevant NGOs if they provide any certifications or endorsements that can set you apart from the competition.
3. Know that cleaner tech is greener tech—and every bit helps.
How hard it is to switch to greener technologies depends a lot on your business. A trucking company will not be able to switch to a brand-new, fuel-efficient fleet overnight. In many cases, significant change can take years and a considerable outlay of capital.
However, that makes it more important to start as soon as possible. A solid transition to green technologies in almost any industry’s supply chain will involve these steps:
- Switching to sustainably farmed and raised agricultural products.
- Choosing logistics companies with fuel-efficient, updated fleets—or updating your fleet for fuel efficiency if you are a logistics company.
- Using sustainable energy such as wind and solar power where available.
- Limiting use of pesticides and investigating organic alternatives.
If thinking about the necessary changes has your head spinning, remember that according to this article in Food Logistics, there is actually often considerable long-term ROI from these changes—sometimes as high as 8:1. And again, do not worry if you can’t implement every change all at once; any step forward is positive progress.
- Reduce waste wherever possible.
The key thing to remember about reducing waste is that you are probably already trying to do it. Resources like fuel and packaging cost money, so when these resources are not being used to their fullest effect, it’s taking money out of your budget.
Reducing waste can take many forms. The more you do, the better you will get at spotting waste and cutting it out. A few suggestions to get started include:
- Re-exam logistics routes and scheduling, and use scheduling software to find the most fuel- and time-efficient options.
- Avoid single-use packaging where possible and opt for reusables like HDPE jerricans
- Set and enforce no-idle policies with your logistics team (and make sure they understand why they are important).
- Use UN-rated salvage drums to hold damaged hazmat containers rather than throwing them away.
- Create narrowly tailored custom packaging designed to achieve its purpose with as little waste as possible.
- Align performance with intent by making waste-reduction metrics a KPI.
A New Way of Thinking
A green supply chain is much more than just a set of reforms you can implement. It is a holistic dedication to creating and maintaining a sustainable business model. It requires creativity, resourcefulness, and foresight—but each one of those has been a point of pride for the American business community almost since its beginning. It is simply another new frontier to cross, and the rewards can be spectacular.
Cory Levins is Director of Business Development at Air Sea Containers.