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Beyond Business As Usual: Charting a Sustainable Path in the Climate Crisis

Updated: Jun 28, 2024


🖋️✍️📝 About the Writer

A strategic leader with over 25 years of extensive industry experience. I hold a Micro Master's in Data Analytics & Supply Chain Management from MIT Sloan and an MBA in Supply Chain Management & Operations from NMIMS. I am also a holder of ISO, Six Sigma Green Belt, and client's best performer awards through the implementation of Sustainable supply chain methodologies.

Sumit Wadhawan

Principal Consultant SCM 4.0


📚📖 Blog Post


I am writing this piece after a long break and thought why not start with something which is not only the need of the hour for one or two or a few, in fact for all of us. For now, more than 25 years, the governments, NGO, and climate activists have been brainstorming in their own collective or in manner of protests to create awareness and some action plans for climate change. This action plan has tended to group countries in terms of their wealth.



Now for the climate negotiations, the distinction is particularly important. The principle of common but differentiated responsibility demands that rich countries responsible for the major majority of historical greenhouse gas emissions cover some of the bills of four poorer countries to adopt carbon cutting plans and compensate for climate damages.

Recently, I got the opportunity to attend a brainstorming session on different aspect of carbon neutrality and carbon credits or coins.

The people at the platform talked about :


  • Importance of ESG: Where are we on ESG & maturity mapping?

  • What should we be doing: Peer & Sentiment Analysis, Materiality Assessment, ESG Risk Assessment

  • How do we get there: Multi-stakeholder collaborative planning, Target Setting & Approvals, Progress visualization

  • Manage Project implementation: Project Implementation, Sustainability Finance Reporting

  • Monitor & Report: Unstructured and structured data collection, Generate Sustainability report


In a nutshell, they covered three key aspects of the day and its importance in these times :


  1. Sustainability reporting of which company & its Suppliers are the key drivers.

  2. Sustainability Finance of which Capital Investment is essential.

  3. Market Positioning of which the key drivers are Supply Chain Partners & Material Compliances.


🌊 Deep diving on the same here is my take on it

  • To create one’s climate strategy, there will be a few trade-offs, and these can be classified as Internal & external.



  • The past progress for over 20 + years towards the SDG and its goals, the key essential question is that the upward trajectory pf rising CO2 levels.


Now this leads to another pertinent question as to how come we have landed ourselves in this situation of climate crises in the first place?

Well, there are few fundamental reasons as we start to deep dive in order to review the climate errors of our past.


The key culprit which surfaces and takes the pie is that how are we managing our commerce /business operations. Business activities that are based on the types of Business that engage, rely on or consume fossil fuels. Not only this, but they also get incentivized to grow larger using fossil fuels.


Now when apply porter value chain as part of bring the beast into this “Supply Chain Management” there is an inherent drive to grow: market share, compete with an edge over competitors over speed, value and time and off course the fear of competition, which all drive up or lower the revenues.


Organizations running full steam or trying catch up on this tread mills create a large carbon footprint and that’s where the climate crises start to aggravate. In the fight between shareholders vs stake holder, the latter calls business, a bad word, even if they create jobs, wealth for communities and products for their use. These negative impacts on climate and the negative public opinions, harbor the opinion that business scaling, moving overseas to get lower cost and mostly regulatory restrictions.


💭 If the above makes sense, then let’s go back to the 2 drivers which I’ve above-mentioned


  1. Economics based on fossil fuels working against the principle of climate change.

  2. Incentive to businesses and over all economics.


Growing companies large or small are still working in silos when it comes to reporting their GHG emissions. Now if one says, let’s keep a stricter balance and try to scale the business, that’s also not viable, which will solve the problem.


The pathway to take here is for the organizations to have their utilities shift towards all renewable electricity and moving away from the fossil fuel sourced natural gas, without other action required by other businesses, though electrification of some fuel-based process which when kept in checks and balance will support driver 1. This path of the corporate commitments and its never mutually exclusive, in fact its all-inclusive treads from beginning with lowering the fossil fuel consumption and installing renewable energy sources.


With driver 1 being bought to stables, I believe driver 2 will fall in line. So here is a twist, by simply switching over won’t address the non-energy GGHG impacts on supply chain. The impacts of growth and scaling remains issue beyond GHG emissions given all the water materials community infrastructure and other resources required to power the economy unless the business improves the use efficiency of all those resources.


In parallels and ensures good relationships with the communities in which they are expanding. Shifting customer perspectives and informing to boost consumption can increase or decrease market size dramatically at times and it's also possible to Invest resources and over production. However, the market size at a given point in general provides some restriction on the activity. What is certainly an issue is how we ensure climate remains a business priority whatever our scale what energy sources are we drawing onto power facilities and our supply chain.


Let's say for example in the land use the organization is engaged in Greenfield development in an environmentally sensitive area or is it developing already in degraded areas what land use practices are used by the suppliers from which the business sources the goal should be to generate as much as revenue as possible per turn GHG emissions irrespective of business scale and deliver prosperity with lower climate price tag.


The increase in emissions can take place in several ways; increase in number of organizations; increasing the size of corporations drop in fossil fuel efficiency all degradation of natural leading to lower natural capacity to remove emissions.


It is the scaling of GHG generation that is more important than the number and size of individual companies.


The way will overcome the increase of GHG is through an all the below policy approach-


  1. Decarbonize utilities the government needs to take a very strict approach on how to support and create the business houses, so that the support the efforts of climate change in their community as well as via business the shareholder and the stakeholders add essential to be bought on the table to have a clear discussion about this.

  2. Decarbonize I would business facilities vehicles and systems.

  3. Ensure natural resources are regenerated after their use and find ways for consumption to avoid natural resource degeneration in the first place.

  4. Lastly the creation off Circular economy & not Linear economy.


Let me dwell on to the point of circular economy. The circular economy calls on companies to redefine and redesign their product life cycle and reclaim products at the end of life, weather that's two days or 10 years or 20 years after the products are sold, salvaging old product content for incorporation into new products. It's a clear and significant sustainable business trend of past few years now, which is being adopted and adapted by corporations.


Circular economy benefits are generally considered to lie in material use versus more direct climate benefits, the concept of reclaiming our products at end of life is powerful enough that it deserves in depth discussion as well as an understanding of the climate ramifications.

Circular economy is more elegant as a term. In my opinion the circular branding is here to stay as well as the operations are much more sustainable. the new product development teams, mount need to think not only for design for excellence but include design for environment and design to disassemble.


There are several questions in designing a circular product like environment friendly cost friendly the standards minimizing the points of attachment in assembly end disassembly.


📊CASE STUDY :

I would like to cite a case from supply chain where in the warehouses are using reusable tote boxes.

Aspect

Details

Application

60,000 Reusable totes made with recycled content, replacing fiber corrugated sheets.

Tote Life

Average lifespan of 8 years per tote, carrying a load of 22 lbs, covering 300 miles per trip movement.

Recycling Rate

90% recycle rate at the end of life.

Environmental Impact Reductions


- Energy Reduction

31% reduction in energy use compared to traditional alternatives.

- Solid Waste Reduction

79.5% reduction in solid waste generated.

- Greenhouse Gas (GHG) Reduction

38.3% reduction in greenhouse gas emissions.


(Source: Orbis corporation via reusable packaging association)



The organizations’ ability to harness the benefits of reusable packaging or depends on how products are used and transported. The organization can book to improve and find opportunities on the re processing footprint like switching to renewable energy, hand changed equation.


The climate strategy we've discussed so far focuses on reducing your carbon footprint. That focus starts with the GHG protocols, and continues through science-based targets, next zero goals and other business programs. Carbon footprint reduction is the goal of such programs to avoid additional burden to the climate crisis.


However, we already have a climate crisis with which to contend from the legacy of GHG emissions that have been already released over the past several decades. You can make a strong case that your climate strategy should not only focus on footprint reduction but also please focus on avoiding the disruptions posed by existing climate crisis that's a different approach in a dressing the climate risk.


Protocols and programs have also evolved in a time when the climate crisis was seen as an issue of future generations crisis has since landed in the here and now. However, since addressing risk is also closely alliance with the business self-interest, I would also guess businesses will take care of the risk themselves with the support off their governments.


Lastly, in addressing the climate change risk the organization changes to infrastructure & behavior in order to be more resilient, better able to respond to extreme weather shocks, and be able to lead the alternative sources of suppliers in the face of supply chain disruptions.


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