Friday 30th Oct 2020 - Logistics & Supply Chain

Counting the carbon costs

What happens when costs just don’t stack up with a green initiative?

This was the thorny issue put to a select group of senior supply chain practitioners at a discussion group hosted by recruitment consultants, Odgers Ray & Berndtson, and AT Kearney, the management consultancy. Sitting in on the meeting, it was clear that there was still some confusion over how carbon footprints for products were calculated.

Ian Midgley, chief supply chain officer for Unilever, posed an interesting conundrum: ‘What do you do when you might be close to say, Wal Mart’s DC – giving you a low carbon footprint with them – but, not so near another customer’s DC?’

Now there’s a problem. Interestingly, Unilever is a member of the Carbon Disclosure Project, so I suspect this is something Midgley will take up with fellow members.

When sustainability and cost reduction align, that’s great – and there seems to be plenty of opportunity for this. But the consensus around the table was that, a hit on profits to fuel carbon savings is unlikely to happen in a commercial environment, that is, unless it’s part of your brand positioning.

As Midgley says, ‘If a business isn’t competitive it isn’t sustainable anyway!’

If, as makes sense, the corporate view on sustainability is only to implement measures that make commercial sense, then once this has run its course, the only means by which further reductions in carbon emissions can be made is through governments implementing a combination of ‘carrot and stick’ initiatives. But then, nobody relishes that.

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