A CIRCULAR SOLUTION HOW PROCUREMENT AND SUPPLY CHAIN CAN HELP SAVE THE PLANET

Repurposing resources through design innovations allows us to save existing resources and materials and support continued economic activities. This foray into the circular economy encourages and requires many sectors to rethink how they will function in the years ahead. Appropriate compromises must be made as society cannot continue to absorb tonnes of waste materials, which are increasing year over year.

The positivity related to the outcomes by leading companies which have adopted circular economy principles and practices, should encourage and embolden other organizations to do so. When we can realize savings in energy, resources, labour, and offset the impact to climate change, we are on the right track.

Energy

Energy and fuel alternatives must continue to be developed in scalable formats to make meaningful reductions in GHGs. Scientists reiterate the criticality of the 2030 reduction target of 1.5C to achieve the mean global average temperature of 13.6C.

Electricity will compete with hydrogen fuels in some sectors. Renewable energies will be multifaceted. It will take decades and is highly improbable that a single renewable energy source will dominate all sectors. Much as today where fossil fuels dominate the commercial, industrial and transportation sectors alongside other forms of energy.

Environment

The environment has been on our radar for 50 years and we have only recently realized how ineffective our tactics have been to mitigate our collective impact. The clock is ticking and more urgency is necessary to address our common problems. The WEIRD economy used the emerging economy countries as dumping grounds for our waste products for decades. This allowed the continued design-for-disposal strategy in the production of goods. Global warming is melting glaciers at a rate that threatens water supplies. Despite these signs, we wait for government edicts to curb our thirst for water in production and attaining natural resources to sustain a lifestyle which conflicts with the balance of the ecosystem.

The environment gets more attention when it affects potential economic interests or social values. The voice of science should have a stronger presence in boardrooms, as there are more responsible solutions. Some of these solutions will not have the same ROI but can be more sustainable. Science needs to be present at the government policy planning stage to have the longterm perspective as to how we transition away from the fossil fuel economy. Science and research will need to make the case for which technologies should be supported in design and marketing and which, just because we can make it, should be given closer scrutiny.

Technology

Disruptive technologies will continue changing how we do business and how we move goods for resilient sourcing in an economy framed around circularity. As new pharmaceutical products may be discovered in our oceans, it will create debates as to who benefits. Sharing of land resources has largely been determined by the companies that buy the rights to control. Agreements, such as the UN Convention on the Law of the Sea, are causing a pause and reflection as to how to manage the wealth of the oceans, where there are few sovereign rights. Developing countries will want an equitable share or access to these relatively new resources.

Governments

Legislation, based on scientific research, is the best means to affect the requisite change. Industry can’t voluntarily reduce emissions and consumptions without governmental intervention. Consumers are at the receiving end of the problem and it is at the source which needs to be corrected for designs, materials, production, health, and economic sustainability.

The social procurement strategies deployed by governmental agencies at all levels must continue and be amplified. It is creating meaningful employment for people facing systemic barriers to employment. Social procurement does not cost government agencies more to train and hire these individuals. It’s a win for all parties.

Supply Chain Responsibilities

Policies are the starting point for adopting ESG practices.

Supply chains are embedded in every organization’s environmental and social footprint. Yet, a 2023 study by Efficio, a global supply chain consultancy, recaps that 93 per cent of C-suites target revenues and profit maximization. This compares to 66 per cent on net-zero plans and 71 per cent on social impact. For supply chain professionals, two thirds continue to

“About half of supply chain decision makers say that incentives do not include climate-related priorities.” assess financial strength and service capacity of their suppliers, with less than one third looking at ethics and governance issues. About half of supply chain decision makers say that incentives do not include climate-related priorities. These self-limiting governance gaps impede the ESG agenda.

Affordability

Governments must realize the need to make the transition in a way that is affordable to the same taxpayer base. Affordability encumbers taxpayers in all aspects of their lives. While the needs may be necessary so is the ability to afford the investments within an acceptable time.

This article is an edited excerpt from Larry Berglund’s book, PlugIn Planes, E-Trains, and Autonomous Vehicles: How ESG Practices are Changing the Purpose of Business. SP

BY MICHAEL SHELTON