Supply chain sustainability and decarbonisation

Why is decarbonisation important?

Sustainability has become a vital topic among most companies in recent years as the impact of global warming has escalated at alarming rates. Although globalisation has a significant part to play in climate change, it doesn’t mean companies should cease international trade. In fact, the impact of the Covid-19 pandemic means global commerce now is needed more than ever to unite countries to manufacture and distribute essential supplies and vaccines.

The way forward is to rethink how we get what we need today without the expense of tomorrow. This article and the Decarbonising Logistics webinar (see recording here) shed light on how to prioritise supply chain sustainability. In the webinar, Dr Sreepadaraj Karanam, Director of Sustainability Strategy at SABIC, and Jackie Hong, ESS Professional from LG Energy Solutions, discuss how companies can implement sustainable supply chain strategies. From Maersk, Lee Sissons, Regional Head of Ocean Management at Asia Pacific; James Savagar, Head of Retail and Lifestyle at Greater China Area, and Mads Stensen, Sustainability Development Manager, explain how the push for green solutions has impacted logistics.

Carbon neutrality for sustainable supply chains

Reaching carbon neutrality – also known as net zero – requires massive innovative solutions and fuel transformation within the next five to 10 years. Research and development into sustainable and renewable solutions are and continue to be needed so the industry can continue to improve.

The power of supply chain collaboration for sustainability

Companies can achieve a sustainable supply chain through active collaboration. Decarbonisation is almost impossible without working with a partner that is serious about the environment, and it requires your organisation to be actively involved in transforming the industry.

LG Energy Solution is a perfect example of impactful collaboration. The company has set their eyes on achieving net zero by 2050. They have actively been introducing more renewable energy while communicating the importance of sustainable solutions to their partners. To prove their commitment, LG Energy has recently joined the RE100 global initiative, which consists of companies committing to use 100% renewable energy by 2050. Several of LG Energy Solution’s plants around the world have already started using 100% renewable energy to power their facilities.

Leverage innovative solutions for supply chain sustainability

Companies need to think outside the box and clearly identify which aspect of their supply chain they can decarbonise.

For example, SABIC is turning their ocean fleet green by using dual-fuel ships based on natural gas to reduce carbon, nitrogen oxide, and sulphur emissions. On land, they are also working on acquiring more sustainable vehicles by using electric trucks to transfer materials between plants and external warehouses, which resulted in a 16-ton reduction in CO2 emissions.

SABIC is also working with industry partners to develop a pilot project that harnesses blockchain technology, which can enable smoother cross-border trade in the region, accelerate the speed of processing by 60%, minimise paper documentation, and achieve potential cost savings.

Supply chain decarbonisation: sustainable today, better tomorrow

Companies need to act now. Climate change has been increasingly important in recent years and with reason. Global temperatures are rapidly rising, and the amount of CO2 emitted to the atmosphere is ballooning despite various efforts.

We are far from where we should be, and our current efforts are not enough if we are serious about reducing CO2 emissions globally. We saw the hottest year ever recorded in 2020 and experts have warned that we are approaching catastrophic tipping points in our climate system. We need to limit the global temperature increase in this century to 2 degrees Celsius above preindustrial levels, while pursuing the means to limit the increase to 1.5 degrees. While we are running out of time, it is heartening to see leaders recognising the urgency as well. However, more can and should be done to stop climate change and achieve supply chain sustainability and decarbonisation. In all, being sustainable starts with a choice to work with the right partner.