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Procurement’s role in supply chain carbon emissions reduction: Framing the CO2 challenge and how to evaluate vendors that can help

08/02/2021 By

A picture of a fruit container perfectly illustrates the challenges of measuring and proactively reducing supply chain carbon emissions. (The photo shows an individual-size container that's labeled like this: "Pears grown in Argentina, packed in Thailand." That means it took about 11,000 miles to ship the pears and many hours of gas-guzzling transportation to get them from the orchard to packaging to consumers.) Beyond pure environmental concerns, procurement and supply chain organizations sit at a nexus of difficult, seemingly conflicting options around price, lead times, quality and risk. But the challenge of reducing carbon emissions is not a zero sum game; rather, it perfectly captures the nature of ESG and sustainability integration into procurement, as well as the changes that need to happen in terms of what we buy, where we buy from, and how those purchases were produced and distributed to reach consumers.

Decarbonization of supply chains is a topic of vital importance. Because carbon dioxide is a major contributor to climate change, we are all responsible for the year-over-year increase of CO2 emissions.

Human activities and consumption habits shape supply chains that are a large source of such emissions. And, at the same time, the potential for improvements is real and massive. According to the CDP, a not-for-profit site that helps organizations with disclosures about environmental impact, “over a billion metric tons (equal to emissions of Brazil and Mexico combined) of emissions would be saved if suppliers to just 125 multinationals increased their renewable electricity by 20 percentage points.”

However, to tap into that reservoir of CO2 (and cost) savings, procurement needs to ramp up its own capabilities.

Therefore, in this Spend Matters PRO brief, we will explore why the battle against carbon dioxide is a battle that we cannot afford to lose. Then, we will provide readers with a structured framework to build a strategy against CO2, positioning procurement at the forefront of that battle. And we will highlight how existing technology can influence the outcome of that battle, including a framework for assessing depth of capability and short commentary on key vendors to know.

Read our full ESG series — with analysts' insights, vendor details and background information on CSR, sustainability and more.

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ESG (Environmental, Social and Governance)