What is a sustainable supply chain?
Your supply chain is sustainable if your operations and those of your suppliers uphold certain environmental and social standards. This includes addressing key issues like greenhouse gas emissions (GHGs), pollution, deforestation, labour rights, human rights and diversity, and equity and inclusion.
The benefits of an environmentally sustainable supply chain
An environmentally sustainable supply chain can help small businesses save money, improve relationships with stakeholders and highlight their commitment to the environment.
Roadmap to sustainable supply chain management
Map your supply chain and its emissions
Identify all the emitting areas of your supply chain by listing your suppliers. Whichever option you choose should look at the supply chain from start to finish.
Option 1: Hire a consultant to do a carbon mapping of your supply chain or use a software that will collect the data and calculate GHG emissions for you.
Option 2: Another way to identify the most emitting areas is to categorize your suppliers by activities. Look especially for the following activities:
- Extraction of raw materials (timber, oil and gas, minerals)
- Heavy processing (cement, wood, iron and steal)
- Long-haul transport and logistics
Engage with key suppliers
Once you have mapped the areas with the highest amount of GHG emissions, focus on high-interest suppliers based on your spending, location and industry. Approach them and raise the topic of adopting more sustainable measures: it can reduce costs, help you find new markets and prepare you for any future regulations. Are your suppliers willing to make any changes?
Collect data and set realistic targets
You can collect data either by asking your suppliers for their GHG emissions data, or use an external firm. Many businesses would not be able to tell you how much they emit, but you can ask about data from these areas:
- stationary combustion: combustion of fuel on-site (diesel, coal, wood, etc.)
- mobile combustion: transport
- electricity consumption
Once you collected data, work with your suppliers to set realistic reduction targets. If you don't have any data, or if your suppliers do not respond, go to the next step for finding suppliers who adopted the best practices.
Find 'green' suppliers
Prioritize suppliers with a pre-existing commitment to the environment. Check if they have certifications showing their commitment as responsible organizations, like B Corp or ISO 14001 and existing ESG (Environmental, Social, and Governance) practices.
You can work with your current suppliers to get them certified or move directly on to find suppliers that already have certifications. Looking for certifications and emissions data protects you against falling for greenwashing. Be careful if suppliers make sustainability claims but don’t have the proof to back them up.
Recommended resources
Discover over 60 green governmental active grants, tax credits and loan programs.
Reducing your GHG emissions is a smart move for both your business and the planet. Discover the key areas in your business where you can take action now.
