BIV MAGAZINE
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BIV MAGAZINE: THE GATEWAY ISSUE 2022 PUBLISHED BY BUSINESS IN VANCOUVER
GREENER SUPPLY CHAINS
Talk, some action and a lot of opportunity to decarbonize local and global supply chains
ALBERT VAN SANTVOORT
C
onsumer demands for cleaner, greener products and processes are making an impact throughout the supply chain. Businesses that do not directly sell to consumers, like the shipping giant A.P. Møller-Mærsk, are facing pressure to go green from customer-facing companies, like Walmart and other large retailers.
Investors are also looking for sustainable businesses, and many institutional investors are increasing their asset allocations in environmentally conscious companies. This shift in customer and investment sentiment has led to a barrage of press releases from companies and institutions that promote net-zero initiatives and commitments. But what does net zero really mean, and will net-zero commitments lead to a more environmentally friendly supply chain? The Sierra Club has argued that many corporate net-zero plans are merely public relations-driven pledges that rely on the purchase of carbon credits, and focus less on directly reducing emissions. Jane Lister, a research associate at the University of British Columbia (UBC) and the associate director for the Centre for Transportation Studies, says that focusing on offsets instead of making emissions reductions affects the overall feasibility of achieving the Paris Agreement’s goal of limiting global warming to 1.5 degrees Celsius. Pressure from investors and consumers is moving things forward, says Lister, but it is also safeguarding the status quo. She emphasizes the need for transformational change to truly make supply chains more
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environmentally friendly. “They’re definitely moving in the right direction and they’re addressing things, but they could be more transformative. They’re incremental steps that aren’t meant to change their business at all; actually, they are meant to increase their business,” Lister explains. “We can’t grow and shop our way out of this crisis.” Globalization and just-in-time inventory systems have made supply chains incredibly complex. A single product can be sourced, manufactured and eventually sold in completely separate regions. Your cellphone most likely contains raw materials mined in Africa, then shipped to Asia to be manufactured into phone parts, then sent to North America to be assembled and eventually sold to people around the world. Each one of these steps often requires carbon-intensive extraction or manufacturing processes, as well as energy required for transportation. Just-in-time inventory systems add another layer of energy consumption because these systems rely on continuous activity. For some, supply chain complexity makes the attainment of net-zero supply chains wishful thinking. “It’s very aspirational,” says Werner Antweiler, associate professor at UBC’s Sauder School of Business.
2022-07-11 3:19 PM
