Monday 28th Sep 2020 - Logistics & Supply Chain

Soon the efficiency of all supply chains will be measured this way

Back in September last year I commented on Wal-Mart’s initiative of asking it’s suppliers for information on their greenhouse gas emissions and how this would be used to judge the efficiency of their supply chains.  Well, now a collaboration of over 315 institutional investors, including Goldman Sachs, Merrill Lynch, Allianz and HSBC, with assets under management of more than $41 trillion, is teaming up with some of the largest purchasing global organisations under The Carbon Disclosure Project for Supply Chain Leadership Collaboration to create a single standardised information request on key climate change information which can be used throughout their supply chains.

The list of names associated with the project is impressive, and includes: Dell, HP, L’Oreal, PepsiCo, Reckitt Benckiser, Cadbury Schweppes, Imperial Tobacco, Nestle, Procter & Gamble, Tesco and Unilever. Each member is selecting up to 50 suppliers to work with on a pilot information request which is underway in this quarter – a wider roll-out is scheduled for May 2008.

The idea behind the initiative seems sensible enough: to create a common single standardised mechanism for corporations to measure greenhouse gas emissions through their supply chains. That’s certainly better for a supplier than the prospect of being asked a whole raft of different questions from each customer.

It’s all very green, of course – which is nice for marketing purposes. But measuring CO2 emissions within a supply chain is tantamount to measuring fuel usage and hence cost. Looking for ways of reducing CO2 emissions within the chain will therefore bring about cost savings and greater efficiency. So, what a wonderful mechanism for gauging the efficiency of your suppliers and for identifying potential areas for reducing cost and waste.

No wonder the likes of Goldman Sachs, Merrill Lynch and HSBC are interested in this initiative, it gives a tremendous insight into the best performing suppliers. Now that’s worth putting your ‘Greenbacks’ on.

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