Climate change has prompted many companies to take sustainability pledges to lessen their environmental impact. These initiatives directly correspond with the 17 Sustainable Development Goals created by the United Nations to facilitate the transition to net zero by 2050. While this is obtainable, making this goal a reality requires many changes, including decarbonizing the supply chain. Here’s what to know about decarbonization and how the circular model affects it.
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What Is Decarbonization in the Supply Chain?
Decarbonization can be divided into two categories: reducing greenhouse gas (GHG) emissions and capturing atmospheric pollution. The first requires using renewable energy sources and sustainable practices. GHG is produced when burning fossil fuels, so, decreasing fossil fuel consumption through renewable energy sources will inevitably lower emissions. Capturing emissions, on the other hand, can be done, for example, by planting more trees – since plants capture carbon for photosynthesis – and halting deforestation.
Decarbonization in the supply chain means companies implement sustainable practices that reduce their carbon footprint and also encourage their suppliers to do the same. Decarbonizing efforts concern the company, its suppliers, and even consumers.
Companies can drastically reduce their emissions by relying on renewable energy sources like wind, solar, and hydropower. Indeed, renewables, such as wind power used in microgrids, can lower electricity costs by 21%-30%.
Companies can further achieve these goals by incorporating a sustainable manufacturing process. This process examines sustainable ways to reduce company waste, adopt a circular model, and lower carbon emissions. A sustainable manufacturing process also reduces power consumption through green software engineering, an engineering branch that focuses on designing software to have a minimal environmental impact.
The 3 Different Types of Emission Scopes
Companies producing greenhouse gas emissions fall under three different scopes, with the third one most challenging to track and reduce.
- Scope one: This scope involves direct emissions produced through the company’s procedures, such as fuel used by machinery and vehicles.
- Scope two: Scope two includes indirect emissions from products obtained from another business, such as those caused by generating fuel or electricity. They are not generated at the company itself but result from scope one emissions from a partner organization.
- Scope three: Scope three emissions include everything not mentioned elsewhere. They are produced by suppliers, transport, and people using the organization’s products.
While scope three emissions are typically the most significant – accounting for as much as 87% of output – they remain the most complex and challenging to address. Active monitoring and a shift to sustainable practices in manufacturing are key to reduce this type of emissions. In addition, employees should also be encouraged to use sustainable transport options, such as public transport or carpooling. Companies should also incorporate recycling and use the circular economy model.
What Is the Circular Economy Model?
The circular economy model is where materials are recycled, circular end-of-life programs are implemented, and items are reused to manufacture new products. A circular end-of-life program is usually offered after products have reached the end of their life cycles and are returned to the company for manufacturing.
The main goal of the circular economy model is to reduce waste by extending products’ life cycles. Traditionally, the approach companies relied upon was to manufacture items at a reduced cost for consumers, inevitably sacrificing the lifespan. This model creates waste, whereas the circular economy emphasises the recycling and reusing of products.
How Circular Models Further Supply Chain Decarbonization
Waste disposal is usually an expensive process. In this process, fossil fuels are burned, contributing to greenhouse gas production. Therefore, companies should look at the circular model and lean manufacturing principles to reduce the amount of waste generated.
The circular economy model focuses on recycling and reusing old materials to eventually reduce the organization’s overall waste. Many products companies manufacture are not biodegradable, so they rust, fall apart, and release harmful chemicals into the environment. Circular end-of-life programs ensure they are returned and do not end up in landfills.
Companies can then either dispose of the product properly – which can still produce GHG emissions – or reuse the materials to manufacture new items.
A Combined Effort Is Required
Carbon emissions are one of the largest contributors to climate change and are a problem that concerns all living beings. The damage could become irreversible unless the rate of carbon emissions is drastically reduced within the next few years.
The suggested circular model can be implemented in almost every aspect of the supply chain, from manufacturing to consumer use. Using this model reduces the effect of carbon emissions and drastically decreases company waste.
A combined effort with a holistic approach is needed to increase decarbonization. The organization as well as its employees and suppliers should work together to actively reduce scope three emissions. Uniting and implementing green solutions can build a sustainable and thriving company.
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