The environment around us is slowly deteriorating as harmful greenhouse gases feed into our clean air, multiplying the number of climate-related risks experienced by the freight and logistics industry.
As the UK government and leading environmental organisations around the world turn up the heat on cargo owners to take on more environmental responsibility, how can building a greener cargo supply chain help reduce environmental impact and reduce the collective carbon footprint of the cargo industry?
Jon Munnery, a company closure expert at UK Liquidators, part of Begbies Traynor Group, explains how to build a green supply chain.
What constitutes a ‘green’ supply chain?
The term ‘green’ is widely used to address economic, social, and environmental sustainability by which a conscious effort is made by a business and its supply chain to protect natural resources, conserve ecosystems, and implement responsible business practices.
To operate a greener cargo supply chain, you need to audit suppliers to ensure that your selection process is geared around efficiency, profitability, and sustainability. Having identified the key parties in your supply chain by tracking every touchpoint and the corresponding stages of your supply chain journey, investigate the sustainability track record of your suppliers.
Supplier sustainability – how to track performance
Supply chain complexities for air, land and sea cargo owners include the changing of hands between numerous suppliers as goods are collected, packed, and delivered, which adds an extra layer of checks. Although the onus lies on the cargo owner to track the sustainability record of suppliers, this exercise predominantly relies on transparency and honesty from the supplier.
In a practical sense, a green supply chain can be established by requesting a record of environmental policies upon engaging in business with a new supplier. This instantly eliminates any suppliers that fail to align with your vision of operating sustainably and building a greener supply chain.
Environmental, Social and Governance (ESG) policies typical encapsulate short-term and long-term targets set out by a business on how to mitigate environmental impact and engage employees. This is a giveaway of how green the business truly is, and what progress they strive to achieve in this arena.
What supply chain sustainability looks like
Supply chain sustainability can take many routes, from working towards a net-zero strategy, invoking new habits to think greener or decarbonising operations.
- Investing in cleaner energy: Using renewable energy sources rather than fossil fuels, such as sustainable aviation fuel (SAF), wind power or electric to decarbonise the freight industry.
According to BP Air, SAF gives an impressive reduction of up to 80% in carbon emissions over the lifecycle of the fuel compared to traditional jet fuel it replaces, depending on the sustainable feedstock used, production method and the supply chain to the airport.
- Upgrading transport to increase efficiency: Adopting digital systems and developing existing infrastructure, such as navigational technology and engines to demonstrate long-term cost savings and increased sustainability
- Training new habits: Welcoming a behavioural change by learning how to reduce fuel consumption, switching to eco-mode, and favouring sustainability over convenience
- Maximising or upgrading space: By making existing resources work harder, such as packing empty vessel space, profitability can be increased
The shift to operating in a sustainably responsible manner is timely as government frameworks are firmly instilled to achieve strict targets.
The clean maritime plan is the environment route map of Maritime 2050 and acts as the UK’s national action plan on shipping emissions. By 2050, all new UK vessels must be designed with emission propulsion capability, all vessels must maximise energy efficiency options and zero-emission commercial vessels must be in operation in UK waters.
The UK Aviation industry follows suit by submitting a formal proposal to fast track decarbonisation targets and achieve net-zero emissions by 2050.
As more suppliers take on board the importance of taking a sustainability-first approach, tracking the sustainability performance of suppliers is becoming commonplace.