US Supply Chains More Vulnerable to Climate Risks

Posted on by Teddy Nee

US Supply Chains More Vulnerable to Climate Risks

Lack of preparation currently leaves supply chains in Brazil, China, India and the US more vulnerable to climate risks than those in Europe and Japan, according to a report by CDP and Accenture.

Supply chain sustainability revealed: a country comparison also finds suppliers in China and India deliver the greatest financial return on investment to reduce their greenhouse gas emissions and demonstrate the strongest appetite for collaboration across the value chain.

The research is based on data collected from 3,396 companies on behalf of 66 multinational purchasers that work with CDP to manage the environmental impacts of their supply chains. They account for $1.3 trillion in procurement spend, and include organizations such as Nissan and Unilever.

Analysis and scoring of suppliers’ climate change mitigation strategies, carbon emissions reporting, target setting, emission reduction initiatives, climate risk procedures, uptake of low-carbon energy, and water risk assessment efforts, as disclosed by suppliers to CDP, were used to create a sustainability risk/response matrix that shows how well prepared suppliers across 11 major economies are to mitigate and manage environmental risk in their supply chains.

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3 ways companies can identify climate risks in supply chains

Posted on by Teddy Nee

3 ways companies can identify climate risks in supply chains

Despite the enormous value at stake, climate risks in supply chains can be hard to see because they are so large. The key to getting it right, according to Acclimatise CEO John Firth, who spoke at the BSR Spring Forum last week, is for managers to address supply chain climate risks in terms of existing stressors — such as procurement costs, on-time delivery, water availability and secure energy and infrastructure.
At the Forum, speakers and participants identified three lenses that can help company managers connect climate change to existing supply chain concerns.

Vulnerable regions

The economic costs of climate-related disasters are rising, in large part because business is consolidating in vulnerable regions in the name of market growth and efficiency. It is projected that by 2070, seven of the 10 largest economic hubs will be in the developing world, and assets exposed to floods will rise from 5 percent to 9 percent of global GDP.

Categories at risk

Sustainability professionals also can address climate risk through global supply or procurement categories that are dependent on stable climatic conditions, such as crops, capital-intensive infrastructure and water-intensive operations.

Sustainability destabilizers

Finally, climate change undermines companies’ ability to address material sustainability issues. Many companies are working to improve economic development in the communities in which they operate, yet climate impacts, especially disasters, can depress job markets for years. Or, while it is typical for companies to commit to reducing greenhouse gas emissions, the lower water runoff associated with droughts can reduce the capacity of hydropower, the most mature source of renewable power

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Five factors of supply chain sustainability

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The five factors of supply chain sustainability

Leadership, empowerment and sharing success stories are among the attributes required to implement sustainable procurement.

That’s according to a panel of experts who shared their top tips at the Institute for Supply Management annual conference in Las Vegas, US last week. The advice included:

Sustainability champions : “Find out who’s passionate about this in your organisation and ask them to be champions.”

Leadership : “You are all leaders to your supply chain, they’re looking to you and your actions and expectations.”

Empowerment : “If you give people a ladder to execute in their own fashion they will take ownership of it.”

Success : “Nothing sells better than success, so we recognise and reward success.”

Metrics : “If you can communicate what you [have done], it is really a powerful story.”

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Coca-Cola refreshes sustainable sourcing goals

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Coca-Cola refreshes sustainable sourcing goals

Coca-Cola has increased efforts to make its supply chain more sustainable by announcing a series of new targets in the areas of sourcing, water use and carbon dioxide emissions.

The drinks producer, which is working with the World Wide Fund for Nature (WWF) on its sustainability programme, announced a target of improving water efficiency by 25 per cent among a series of sustainability goals for 2020. It also pledged to reduce carbon dioxide emissions of its drinks by a quarter and to work with the WWF to ensure that materials for its PlantBottle, which is manufactured entirely from plant materials, are sourced sustainably.

Other additions to its 2020 sustainability strategy include working to ensure key ingredients, such as sugar cane, mango and pulp and paper are sourced sustainably and replenishing 100 per cent of the water expended through its operations. It also aims to reach a 75 per cent recovery rate on the bottles and cans it sells in developed markets.

Coca-cola’s strategy is one of many good examples about how supply chain management is utilized into operations. If you are interested in how to improve your supply chain management, feel free to contact us.