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Green Supply Chain Management, It’s Good For the Environment, It’s Good For the Bottom Line

by Marguerite Manteau-Rao


While the majority of global executives consider carbon reduction an important aspect of purchasing and supply chain management, only a minority follow through:

That’s too bad, according to the McKinsey study. Not only are these companies not helping fight climate change as much as they could, they are also missing out on some cost lowering opportunities. The facts:
  • For consumer goods marketers, high-tech, and other manufacturers, between 40-60% of their carbon footprint is in their supply chain.
  • For retailers, the number is even higher, 80%.
  • Many of the opportunities to reduce emissions carry no net life-cycle costs, with the upfront investment more than paying for itself through lower energy or material usage.
  • Others may require tradeoffs between emissions and profitability, in areas such as logistics and product design.
  • Forward-looking companies are using such discussions as opportunities for supplier development.
  • This opens up the possibility of still lower costs and improved operational performance, in addition to helping suppliers remove carbon from their supply chains.

Wal-Mart comes to mind, as a great example of a company that understands the multiple benefits of a greener supply chain. The question of, why are not more companies following Wal-Mart‘s lead, warrants further examination. Is it lack of knowledge? Having to attend to other, more pressing issues? Inertia? What do you think?

Marguerite Manteau-Rao is a green blogger and marketing consultant on sustainability and social media issues. Her blog, La Marguerite, focuses on behavioral solutions to climate change.