The grass (or at least the supply chain) may in fact be greener on the other side of the pond. When it comes to addressing global warming and reducing emissions in the supply chain, the United Kingdom is setting an example for the rest of the world.
Several U.K. government agencies have teamed up with the Carbon Trust, a government-funded company whose mission is to promote a low-carbon economy, to develop a way to measure the amount of greenhouse gases expended in bringing a product to the store shelf. This would allow manufacturers to label their products with a "carbon point" score in much the same way that electrical appliances have energy-efficiency scores.
Now another group, the London-based Carbon Disclosure Project (CDP), has begun working with Tesco, Unilever, Cadbury Schweppes, Imperial Tobacco, Procter & Gamble, and Nestlé to help them collect and report supply chain information that's relevant to climate change, like data on greenhouse gas emissions. The participating companies will also develop emissions-reduction targets and strategies for dealing with climate change.
The collaboration marks the first time that private enterprises will work together to create a single, standardized mechanism for measuring a supply chain's environmental impact. To collect information, CDP will send out a single questionnaire on behalf of all of the members of the Supply Chain Leadership Collaboration, a working group within the organization. This will greatly decrease the burden on suppliers, who might otherwise receive many separate requests for the same information.
"For many companies, it is the supply chain that makes up the vast majority of their emissions, so this initiative is vital in helping them reduce their total carbon footprint," says CDP Chief Executive Paul Dickinson. "These collaborations mark a very significant milestone in corporate action to mitigate climate change. By engaging their supply chains in the CDP process, companies will encourage suppliers to measure and manage their greenhouse gas emissions and ultimately reduce the total carbon footprint of their indirect emissions."
The announcement follows the release of a CDP report showing that most of the U.K.'s 350 biggest companies were unable to estimate their supply chain-related emissions.
Back on the homefront
Although the CDP's major focus is on the U.K., it is also looking farther afield for partners in environmental protection. In September, the group announced a partnership with Wal-Mart, which will ask its suppliers to measure the amount of energy used to create products and move them through the supply chain. The retail giant is also conducting a pilot project that will focus on seven product categories to determine their overall environmental impact and look for innovative ways to improve energy efficiency. The seven categories are DVDs, toothpaste, soap, milk, beer, vacuum cleaners, and soda, which were chosen because they are everyday items commonly used by consumers.
As part of that initiative, News Corp.'s Twentieth Century Fox Home Entertainment division has already conducted a supply chain analysis of the carbon impact of the production, manufacture, and distribution of its DVDs.More than 20 of Fox's suppliers provided detailed information about their own energy use and greenhouse gas emissions. That analysis led to an industry standard for measuring the carbon impact of DVDs, and its methodology is being adapted for other consumer goods.
It's not just Wal-Mart that's looking to clean up its distribution act in the United States, however. U.K.-based Tesco, which is spending more than $2 billion to open outlets in the United States this fall, is paying $13 million for a solar roofing system at its new distribution center in Riverside, Calif. The project is believed to be the world's largest rooftop solar panel installation.
And consumer goods manufacturer JohnsonDiversey has received the Green Development Award for 2007 from the National Association of Industrial and Office Properties for its new DC in Sturtevant, Wis. The 550,000-square-foot facility uses 40 percent less energy than a code-compliant building designed to minimum standards. It also uses green power, such as solar and wind, to provide 100 percent of its electricity, making it the first distribution center in the world to be able to make that claim.
Editor's note: For more information on the Carbon Trust, see "How big is your carbon footprint? The U.K. wants to know" in the Quarter 3 2007 issue of CSCMP's Supply Chain Quarterly.