Supply Changes: Sustainability and Responsibility in the Modern Supply Chain

 

The Natural Gas Paradox, or Why Supply Chain Traceability is Important

Chances are you have at some point driven behind a truck that boasts a “Powered by Natural Gas” label. You have, logically, assumed that this truck is reducing carbon emissions with each shipment it delivers. Or, perhaps you work for a company that employs natural gas to help “green” its supply chain. Either way, you are confident in your belief that natural gas trucks are good – important, even – for the planet.

You are most likely wrong. While natural gas does emit 50 - 60% less carbon dioxide than other fossil fuels, a recent study from Environmental Science and Technology revealed that the process of producing natural gas, and converting trucks to run on natural gas, releases a fair amount of methane. Methane is a much more potent gas than carbon dioxide, and researchers have asserted that the methane-producing conversions to natural gas could actually be more detrimental to the environment over the next century than if we all stick to conventional methods.

Before you give up on sustainability and start throwing your recycling in the garbage, know that this is not an article about the futility of greening your supply chain. If anything, the recent findings bolster optimistic arguments that consistent, proper research into a supply chain can have lasting positive environmental and economic effects. With environmental issues at the forefront of many conversations, supply chain managers cannot afford to forgo important changes. But those changes need to be well-researched, not implemented because of trends. “Going green” is more than a buzzword: it’s a necessary step to garner consumer trust and a supply chain that can survive well into the future.

As far as the natural gas issue goes, manufacturers of natural gas have options to change their process and produce less methane. Customers of natural gas suppliers should inquire into the manufacturing process and, before investing for the sake of ecological benefits, make sure their money is going towards a well-researched and environmentally friendly decision. There are multiple methods of natural gas production that don’t have such grievous effects on the environment; ask your natural gas provider if they employ such methods. Companies such as Shell, Chevron and Aramco offer environmentally friendly methods of natural gas liquefaction.

Give it a Green Light

There are countless methods companies can employ in order to “go green”. Through tracing their supply chains carefully, companies can increase efficiency, productivity, and ecological impact. The United Nations released “A Guide to Traceability” in 2014, a report focused on traceability as an economically viable and sustainable approach to supply chain management. They recommend that companies avoid expensive and ineffective changes by partnering with environmental organizations that will help them make sustainable choices, both environmentally and economically. In addition to traceability, companies can benefit from sustainable alternative energy initiatives. The U.S. government offers tax credits for alternative energy use, both in appliance and vehicle use. Most states offer additional incentives to businesses that wish to boost their sustainability standards.

More and more consumers are making educated decisions about their purchases, from food to home goods. As environmental issues gain more traction, consumers will want more and more information from their products. Remember Patagonia’s eco-friendly advertisement from 2011? Despite the brand’s altruistic assertion of “Don’t Buy This Jacket”, sales grew almost 40% in the two years following the ad’s release. Consumers align themselves with eco-friendly brands, choosing to pay more for products they perceive to be greener. Companies that are honest about their supply chains generally fare better than those who appear to have something to hide. 

In recent years, big name corporations have taken steps to green their own supply chains, saving money and boosting PR. Apple claims to have reduced as much as 90% of its carbon emissions in Apple TV production from 2007-2011, and up to 21% in 15-inch MacBook Pro production from 2006-2011. The Silicon Valley-based firm also conducts regular audits on its factories. In 2016 corporate giant Unilever achieved zero waste to landfill at 600 of its sites. CEO Pier Luigi Sigismondi reported that Unilever would save around 200 million euros (over $225 million) annually from its progress. Actions such as waste management initiatives and environmentally-friendly transport are becoming indispensable aspects of every supply chain, and it often starts with traceability.

Supply Chain of Good

Companies can make a big impact at every step of their supply chain, and not only environmentally. After the devastating floods in Texas rendered countless residents without necessary resources, Anheuser-Busch cut production of Budweiser beer at its Georgia factory, and began instead to can water. The cans will be distributed to displaced flood victims this month. Anheuser-Busch has distributed water cans to victims of storms in the past. Not only do the company’s efforts boost consumer trust, they also legitimately save lives and help citizens (and, most likely, past customers) in need.

Recent news has been filled with examples of how supply chains can be harmful, from toxic rivers in Mexico to enslaved fishermen in Indonesia. In an era of increased accountability, corporations should make visibility a priority. Instead of simply meeting basic standards or risking being involved in harmful supply chains, it is important to consider how to examine the supply chain, looking for areas to boost efficiency, environmentally friendly initiatives, and social responsibility. Companies in every industry can afford to make sustainable and positive choices, utilizing their supply chain for good.

 

Editor's note: this post has been updated for accuracy.

 

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