Value Chain Approaches to a Low Carbon Economy
It is widely acknowledged that significant progress on reducing the impact of climate change depends on reducing the environmental impacts of the network of partnerships through which companies source, produce and distribute their products, otherwise known as supply chains.
This report illustrates the development of supply-or value chain approaches that address current environmental challenges and increase efficiency and profit. The report describes the economic and environmental pressures on existing value chain models; makes recommendations about analyzing both the full life-cycle of products and services, as well as each individual element of the supply chain; identifies examples of innovative action by best-practice companies; and discusses the importance of working with public officials to develop supportive policy frameworks.
The report provides persuasive data and a conceptual framework for remaking supply chains with an eye towards reducing their environmental impact. It begins by documenting how climate change threatens existing supply chain models, with good data on the impact of energy, raw materials and carbon emissions on the financial health of the business sector. It first analyzes the different phases of the supply chain — including sourcing, production, distribution, and product use and disposal - that must be considered when companies work to reduce environmental risk and their carbon footprint. It then describes additional strategies relating to the internal alignment of a company or sector’s commercial and environmental goals, the buyer-supplier relationship and the importance of life-cycle analysis and influencing public policy. The report next provides brief overviews of seven best practice companies and business coalitions working to reduce carbon emissions in their supply chains. Finally the report ends with a discussion if the importance of consistent frameworks for carbon pricing, carbon measurement and communication about carbon emissions in the fight to reduce emissions along the supply chain.
This report provides a good schematic overview of a complex topic. It was prepared for a workshop at the World Business Summit on Climate Change hosted by Business for Social Responsibility, and is pitched to an audience that is highly knowledgeable about international business, business operations and business’ efforts in the area of carbon reduction. The report is best for background information, and for helping sustainability and economic development staff understand the role of supply chains in carbon reduction.