Supply Chain / Operations / Facilities

Summary

Supply Chain and Operations Section of the Sustainability Playbook for Business provides recommendations of ways to improve supply chain and operations practices to cause less harm in locales which your company operates. In addition, this section provides guidance to increase education on sustainability and building resilience in the supply chain and operations practices.

Why Supply Chain and Operations Practices Matter

In 2019, there were $82 Billion worth of insured losses [1] from natural disasters in the United States alone. According to McKinsey, the global supply chain is at the brink of disruption caused by climate change. [2] The characteristics of modern supply chains – their global geographical reach, specialized inputs that are increasingly produced in specific locations, and reduced inventories from just-in-time production – render them more vulnerable to disruption by climate risks. [3] [4] These risk exposures come from disruptions from increased frequency and magnitude of natural disasters and shock events, and destabilization of political and labor landscapes.

Ironically, the 2,500 largest global corporations account for more than 20% of global GHG emissions, yet emissions resulting from corporate operations are typically exceeded by those associated with their supply chains [5]. This puts Supply Chain and Operations in a unique vicious circle; Supply Chain and Operations practices that are not sustainable increase carbon footprint that bring about climate change, climate change drives increased natural disasters, and such natural disasters cause disruption and incalculable losses to Supply Chain and Operations. In conclusion, we believe Supply Chain and Operations carry an oversized weight of responsibility to transition to more sustainable practices.

Does This Apply to the Tech Industry?

Yes! Researchers Lotfi Belkhir and Ahmed Elmeligi estimate that the tech sector will contribute 3.0–3.6% of global greenhouse emissions by 2020, more than double what the sector produced in 2007 [6]. The estimated 2020 global footprint is comparable to that of the aviation industry and larger than that of Japan, which is the fifth biggest polluter in the world. Data centers will make up 45% of this footprint (up from 33% in 2010) and network infrastructure 24%. And these numbers are likely to get worse as exponential growth in data traffic and storage continues.

How to Develop a Sustainable Supply Chain Practices

Companies can take proactive steps to both increase resiliency, and reduce their carbon impact using existing methodologies and resources. We highlight the best practices and relevant resources below that apply across various industries.

01

Promote and Enforce Ethical Sourcing

Gain visibility into how your suppliers are extracting or producing raw materials to ensure they are following sustainability standards. This can be done both by setting clear sustainability standards such as IBM and Walmart, and employing technologies such as Blockchain to verify suppliers sourcing practices. We recommend the sustainability standards to include not only the environmental sustainability standards but also human rights protection standards, such as policy implemented by Gap.

02

Power Your Operations with Renewable Energy

The RE100 initiative led by The Climate Group in partnership with CDP, its mission is to accelerate a global shift to clean energy by bringing together hundreds of large and ambitious businesses committed to 100% renewable electricity. To date, 240+ Fortune 500 companies have made a commitment. You can reference the list here, and join the initiative. 

We also encourage you to learn more about commitments made by Google and Apple on 100% renewable energy.

03

Innovate Your Packaging Practices

Consumer containers and packaging is the largest single portion of the U.S. municipal waste stream, comprising nearly 30% of all waste (75 million tons). [7] Single-use packaging is wasteful and not designed to align with a circular collection and recycling model. You can innovate your packaging practices by following examples such as Pepsi and Impossible Foods.

04

Institute a Remote Work Policy

No single activity contributes to more greenhouse gas emissions than driving to and from work. Transportation is the number 1 source of emissions in the U.S, and light-duty vehicles contribute the lion’s share of all carbon emissions [8]. According to a study, nearly 37% of all jobs in the U.S. are information-based and can be accomplished remotely [9]. The benefits of Remote Work extend beyond reduced carbon emissions; it increases productivity lost due to a long commute, lessens traffic congestion, and reduces fatal traffic accidents. The companies that offer flexible work policies are likely to attract and retain talent. 

You can reference 100% Remote Work companies such as GitLab and Automattic for ways to transition to partial to full Remote Work company.

Resources

Sustainability Goal Setting: Science-Based Targets

In 2015, 195 countries signed the Paris Agreement pledging to a commitment of making the necessary changes to keep global warming below two degrees Celsius above the temperature of pre-industrial days. Many companies also made a similar promise. ScienceBasedTarget.org serves as a resource to help companies develop and adhere to their own specific science-based targets.

Measure Emissions: Tools for Assessing GHG Emissions in Agricultural Supply Chains

Agricultural emissions are driven by complex interactions between natural and human processes, and estimating these emissions with any accuracy requires data on agricultural management, soil, and climatic factors at the site of production. This report provides an overview of available resources (i.e. standards, methodologies, tools, and calculators) for assessing emissions from agricultural production and agriculturally-driven Land Use Change.

Remote Work Policy: Remote Work Toolkit

GitLab is the world’s largest all-remote company with over 1,300 employees located in more than 65 countries around the world. Head of Remote, Darren Murph, has recently shared Resources for companies embracing remote work.

Certification: ISSP Green Business Certification

We believe companies will be in need of more sustainability professionals. ISSP and GBCI have recently announced that ISSP now offers the ISSP Sustainability Associate (ISSP-SA) and the ISSP Certified Sustainability Professional (ISSP-CSP), to build capacity and recognize sustainability professionals worldwide through rigorous professional credentialing. Learn more about ISSP Sustainability Professional Certification here

Additional References

Institute of Public & Environmental Affairs

IPE’s two platforms integrate environmental data to serve green procurement, green finance, and government environmental policymaking, using cooperation between companies, government, NGOs, research organizations and other stakeholders and leveraging the power of a wide range of enterprises to achieve environmental transformation, promote environmental information disclosure and improve environmental governance mechanisms.

The Responsible Business Alliance

The Responsible Business Alliance is the world’s largest industry coalition dedicated to corporate social responsibility in global supply chains.

The Sustainability Consortium

The Sustainability Consortium (TSC) is a global organization transforming the consumer goods industry to deliver more sustainable consumer products. We are dedicated to improving the sustainability of consumer products.

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