Your supply chain: an excellent opportunity for reducing environmental impacts

Analyzing the internal operations of your company seems like a good starting point on the road to increasing efficiency and reducing environmental impacts. However, the first step to reducing impacts is identifying where these impacts occur and how extensive they are. Focusing on internal operations is helpful, but thorough analysis might show you how to more efficiently tackle the issue.

Assessing the environmental impact of your products throughout their life cycle, a process called Life Cycle Assessment (LCA) can help you identify the exact source of environmental impacts, whether in your own processes or in your supply chain. If most of your impacts come from outside company walls, optimizing internal processes may contribute very little to reducing absolute impacts. Sometimes, to create change it is better to not start with ourselves.

Look Beyond The Man in the Mirror to Reduce Environmental Impacts

An excellent resource for any company interested in improving its sustainability is the annual GreenBiz State of Green Business report, describing corporate environmental progress made that year. For the report, GreenBiz measures indicators such as energy efficiency, greenhouse gas emissions, and environmental reporting activities. The 2014 edition includes a particularly interesting index titled “Where Impacts Happen,” examining whether the environmental impacts in 18 different industrial sectors occur directly (in the companies’ own facilities or operations) or indirectly (in the companies’ supply chains).

Remarkably, it turns out that in many industries – including the food & beverage, telecommunications, and retail industries – only 20% of environmental impacts occur in internal operations. Over 80% of environmental impacts occur indirectly, in supply chains.

Industries with more than 50% direct environmental impact can be grouped into the same category. They include utilities, basic resources, and oil and gas – all industries that are found at the top of the supply chains of other industries, contributing to their indirect impacts.

Do You Know Where Your Company’s Environmental Impacts Occur?

In many sectors, looking at supply chains in addition to internal operations will provide a better opportunity to manage risk and reduce overall environmental impacts. Supply chains are often complex and interconnected, and navigating them may be challenging. However, it is worth investing in a thorough supply chain analysis. A transparent supply chain is essential to manage business risk and ensure compliance with laws and regulations. And, as we’ve shown, it is also an excellent opportunity to identify broader opportunities for environmental improvement.

Paula Bernstein

Paula Bernstein worked for PRé from 2013 to February 2018. Her areas of expertise included environmental product performance, LCA databases, and supply chain sustainability measurement. Paula collaborated structurally in LCA and sustainability metrics implementation projects for many industries, such as apparel, food, and building & construction. She also worked closely with the PRé software team to implement databases in PRé’s software package SimaPro.

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