How Can Companies Reduce Their Carbon Footprint?

Management logistics of Industrial Container Cargo for Import Export business.

Reducing carbon emissions needs to be a global priority. If the world's population continues emitting carbon dioxide at the current rate, scientists estimate that the planet will warm to unsuitable levels within 20 years, which is an environmental risk for everyone. Beyond what an individual can do to reduce their carbon footprint and increasing energy efficiency, companies reducing carbon emissions play a key role in improving our chances of fighting climate change, and we need leaders to take a stand.

In particular, supply chain managers can use more sustainable and carbon neutral technology to produce goods without putting an additional strain on the planet. By educating themselves on how to achieve carbon neutrality—or even how to become a zero carbon company that values energy efficiency —supply chain managers play a key role in the battle against climate change.

The role of the supply chain

A company is part of the supply chain if it plays a role in planning, implementing, or controlling the production and flow of goods and services to get them to an end-user. These goods and services can also include information, so even software companies can be part of the supply chain. Many companies are also part of the global supply chain, which means they work with companies overseas to create products.

A supply chain company can become carbon neutral by neutralizing the effects of its greenhouse gas emissions. The way to do so is to calculate a company’s carbon dioxide emissions and create a plan to become more energy efficient to offset these emissions. If the emissions are fully offset by other changes, it is considered a carbon neutral business. A supply chain company cannot make these changes overnight, but becoming carbon neutral in the long run is possible for every company. It’s important therefore to understand how to create systems that will lead to becoming a zero carbon company and understand the steps a company can take to reach this goal.

How can companies reduce their carbon footprint?

There are many ways a supply chain company can reduce its carbon footprint. Like all companies, tactics like recycling paper, using web-based communications, and reducing air travel will help a supply chain business become a zero carbon company. Viewing supply chain through an environmental lens is something all companies need to do. Additionally, for supply chain companies, in particular, setting the right carbon reduction targets is beneficial. A supply chain is composed of many discrete components, and a separate target must be established for each of them. Because a specific supply chain company might not play a role in each step of the supply chain, it’s important to try to reduce carbon emissions in each area of production, rather than outsourcing the carbon-intense components to reduce the reports of baseline emissions.

The most energy-intensive factor is the upstream supply chain, which refers to raw materials coming into the company. Specifically, transportation is the second-highest emitter of greenhouse gases globally, so ensuring that the goods coming in via third-party sellers are being transported in an energy-efficient way⁠—via monitoring the vehicle and type of fuel used⁠—will help a company in its sustainability efforts. In fact, one-third of carbon emissions in the US come from transportation, so a company can make great strides towards a net zero carbon footprint by focusing on renewable types of fuel for the movement of their goods. Renewable fuel is an area any company can explore to have an impact on their carbon footprint. Additionally, technology such as self-driving vehicles can reduce carbon emissions, and a technology-minded supply chain manager may choose such carbon neutral investments. A supply chain manager can determine the appropriate budget and resources that will be invested in developing new technologies. They can choose to hire engineers and data scientists with a background in machine learning to improve functionality. New software tools allow a supply chain manager to view all aspects of the supply chain in the same place and therefore gain a better understanding of any bottlenecks. Visualization tools have transformed many areas of business, and the supply chain is one of them—if a supply chain manager has advanced supply chain visibility, they can make more informed decisions about how to improve upon. Finding more energy efficient ways to receive and transport these goods, as well as store them, can help a supply chain company achieve a net carbon zero footprint.

Knowing how supply chain technology functions and the systems that are currently in place is critical to anyone looking to create a sustainable supply chain, particularly for someone working in supply chain management. Having a leader with a strong background in technology and innovation will benefit any company working with a supply chain, and understanding technology and data is important to supply chain management of the future. Customer satisfaction is also linked to the supply chain systems created. Therefore, as a supply chain manager, a background in the technologies that make up the supply chain will improve your career prospects and benefit the company’s business objectives as a whole through increasing customer satisfaction and creating money saving systems for the company. At the same time, all of these efforts can help reduce climate change, the carbon footprint of any company, and our environmental outlook.

Data and technology: Building a sustainable supply chain

AI, machine learning, and data science play a significant role in helping supply chain companies reduce their carbon footprint. Utilizing carbon neutral technology, such as integrating information management into sustainability efforts, has been cited as a key way for supply chain companies to reduce emissions. This will help them monitor their progress⁠—using data to understand if carbon emissions are truly being reduced is a key strategy for supply chain companies looking to become carbon neutral. New technologies such as 3D-printing could also potentially help companies become more energy efficient by only using the exact resources needed and by not having a surplus inventory. Having an executive who is aware of which technologies lead to carbon reductions, as well as how to hire a team who can implement these technologies, is critical in the battle against climate change.

Additionally, supply chains are made up of various nodes and links between sources. Using machine learning models for efficient routing can help a company transport its goods more cheaply and with a lower carbon footprint. A knowledge of what artificial intelligence and machine learning options exist to reduce carbon emissions can benefit any supply chain manager looking to take their company to a net zero carbon footprint.

Amazon, Starbucks, and Levi: Companies reducing carbon emissions

Major organizations are taking steps to become carbon neutral companies that value energy efficiency, and other supply chain companies can learn from their efforts. Amazon has recently agreed to disclose its carbon footprint, and has stated that its goal is to have 50 percent of its deliveries have a net zero carbon footprint by 2030. Having a large retailer make this commitment to transparency and reduction is critical for showing smaller companies that change is both important and possible.

Starbucks has also demonstrated the importance of analyzing the supply chain to cut carbon emissions. They broke their supply chain into the cultivation/processing stage, the roasting/packaging stage, and the consumption stage. They looked to the most carbon-intensive component, the consumption phase, and focused their efforts there. Starbucks has also invested in energy-efficient technologies such as Green-E certified Renewable Energy Certificates to cut emissions and decrease their carbon footprint.

Levi Strauss & Co. (Levi) recently rolled out a plan to reduce carbon emissions in its supply chain by 40 percent by 2025. The plan comes complete with a strategy to switch to 100 percent renewable energy in its own facilities. For Levi to reduce its supply chain emissions, however, it must work with third-party suppliers⁠—a key component in reducing emissions in the supply chain. For example, cotton-growers account for 10 percent of Levi’s carbon emissions in their supply chain, so working with more energy-efficient suppliers or helping existing suppliers to cut their emissions will help Levi become a more sustainable organization.

It’s critical for large companies to take a stance on reducing carbon emissions in the supply chain. For one thing, testing out new technologies is important in understanding what makes for an effective and sustainable supply chain that is also energy efficient, and smaller companies often don’t have the budget or staff to do so. Larger companies have more money to invest in researching these technologies and determining how to best employ them. Additionally, smaller companies can learn from the plans larger organizations create to become carbon neutral companies, and they can adopt these plans themselves. The importance of sustainability will alter supply chain management in the coming decade as the world fights climate change. Supply chain managers can use data to cut down on resources, which could have a strong environmental impact while also increasing customer satisfaction. Not only will this benefit the environment and customer satisfaction, but it will also save money for the organization.

Furthermore, as Amazon demonstrated, the importance of transparency cannot be understated⁠—companies and consumers of products need to be aware of how well certain organizations are working to reduce carbon emissions and their carbon footprint, and how well they’re executing on their goals. A consumer can then choose to spend their money on a carbon zero company, or a company approaching that goal, rather than an organization that is taking fewer steps towards becoming carbon neutral. Large companies lead the way in transparency efforts and can work to ensure that it becomes a global priority.

How an online Master's in Supply Chain Management from UT Haslam can prepare supply chain managers to build a more sustainable future

Executive support is one of the key factors in ensuring that a company adopts green policies to get to carbon footprint zero and more energy efficiency. This focus on sustainability from leadership is critical to reducing a company’s carbon footprint. UT Haslam’s online Master's in Supply Chain Management (MSSCM) trains its students to become leaders in the supply chain field. As environmentally-conscious managers, they can make a difference employing sustainable tools that support decreasing their carbon footprint. Having energy efficiency top of mind when implementing new systems and understanding how to make this impact will help further a company’s goal towards having a zero carbon footprint.

UT Haslam's leading in supply chain management instruction and expertise is now offered online. The online Master's in Supply Chain Management (MSSCM) includes coursework that enables supply chain leaders and prepares them for the widespread use of data and technology in supply chain management.

UT Haslam’s MSSCM focuses on global supply chain management, which means working with companies around the world to create sustainable products. A supply chain, much like the fight against climate change, must be a global operation, and UT Haslam’s online MSSCM offers students the skills to become leaders in the field.

While being offered completely online, which increases accessibility for students who won't attend on-campus courses, the hands-on MSSCM program maintains fluid communication between professors and students. Candidates learn to work with companies and other partners on remote teams to incorporate technology into supply chain management.

To learn more about our programs, visit here.