COULD PROCUREMENT BE THE KEY TO NET-ZERO SUPPLY CHAINS?

We explore procurement’s role as a driving force for the supply chain industry to achieve its net-zero ambitions

WRITTEN BY: GEORGIA WILSON

Traditionally, challenges in the supply chain industry ranged from volatile supply and demand to rising costs and visibility. Today, supply chains have the added pressures of high prioritisation of environmental, social and governance (ESG) efforts, regulations and ratings. The driving force behind this transition comes in a variety of forms but includes consumers, society, banks and investors, the corporate sector, and auditing and service providers.

One crucial priority for those in the industry is meeting net zero initiatives and goals. Despite the urgency to reduce emissions, the road to net zero is “flanked by multiple laws and regulations,” as Jasmin Pennicke, Senior Manager at PwC, explains. To tackle this minefield, “it is clear that you need transparency and reduction measures to achieve carbon neutrality”.

Despite more than 90% of an organisation’s greenhouse gas emissions (GHG) coming from the supply chain, many struggle to make a meaningful dent in them.

“One of the biggest challenges now for companies is to deep dive assess how many emissions they can reduce depending on a certain measure, product, or material,” explains Pennicke, while they continue to battle the usual cost targets.

“The comparison of cost to product carbon footprint will become a decisive criterion in future award decisions,” she adds.