Tuesday 22nd Sep 2020 - Logistics & Supply Chain

Going green is a supply chain function

The “greening” of companies needs to be taken out of the hands of marketers and given to supply chain managers that can influence the procurement processes, according to Aon Global Risk Consulting.

An Aon report reveals that 76 per cent of respondents said they only had limited visibility of their suppliers’ supply chains leaving them open to reputational risks should their supplier be found to be less than green.

Alex Hindson, head of enterprise risk management at Aon, set out a five point plan to manage this risk:

1. Embed environmental thinking in procurement processes and function: take greening initiatives out of the realm of pure marketing and PR, and integrate a green way of thinking throughout the business.

2. Measure what you are doing: if the supply chain is going to be truly green it is essential to understand the environmental impact and carbon footprint of what you buy.

3. Set objectives: decide from the outset what is important and set some change management objectives for improvement.

Be realistic with the goals you set.

There is no point saying you want your company to be completely carbon neutral in the first year of the project if you know this is unachievable.

4. Measure and track the total cost not just financial cost: examine where waste is occurring in the supply chain and where this can be cut down.

A major cost to companies is the waste of raw materials.

5. Engage suppliers: educate suppliers in objectives around sustainable development then evaluate their performance and embed this in selection and performance management processes for suppliers.

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