Sep 13, 2021

Motivate partners, vendors and networks to decarbonise

Energy
Decarbonisation
CarbonEmissions
Supplychain
Dominic Ellis
3 min
The supply chain in a decarbonised era isn’t simply about technology and financing but a matter of relationships, states new Guidehouse report

Companies must find ways to motivate their partners, vendors, and transportation networks to decarbonise without disrupting the delicate connections on which their businesses rely, according to a new Guidehouse report entitled Navigating the Decarbonisation Journey.

"Unlike many decarbonisation challenges, the supply chain isn’t simply a matter of technology, financing, and other technical issues; it’s a matter of relationships. But delicate as they may be, business relationships can be a powerful motivator for emissions reductions as well," it states.

The faster an organisation can become less dependent on fossil fuels, the less vulnerable they are to risk from climate change impacts and low carbon shocks, making them more resilient amid a quickly- evolving business environment, the report adds.

"Companies need financial solutions that enable a cost-neutral or profitable implementation of their emissions reduction measures in a timely fashion," it states. "Better yet, they need their financial solutions to help accelerate the pace of their decarbonisation journey."

EU preparations to reach climate neutrality by 2050 and the US announcing an aggressive emissions target of 50 to 52% reduction below 2005 levels by 2030 eliminate any remaining doubts about the global shift toward climate regulation, it states.

The report highlight seven key elements for thriving in a low-carbon future:

Agility Agile companies understand the dynamics of an evolving business environment and introduce limber, supple working practices. This enables them to quickly pivot toward changing market demands or new regulations.

Circularity Companies that embrace circularity position their operations toward products as services, and take a holistic view of the value chain.

Connectedness Connected companies operate in a wider, more intricately integrated ecosystem that enables them to recognize and respond to changes quickly.

Transparency Transparent companies develop clear, public reporting systems that allow investors, customers, employees, vendors, and partners to understand their climate actions, plans, and positioning.

Operational Efficiency Efficient companies are low impact companies. By deploying cutting-edge technology, businesses can drive out costs, maximize profit margins, and minimize emissions.

Resilience Resilient companies can respond to climate change impacts and low carbon shocks, whether they occur directly to operations, in the market, or via their supply chain.

Social Equity Companies committed to social good, from fair treatment of employees to community development, reap the benefits of their investment. As climate change impacts exacerbate social inequities, those organizations that commit to consider and address historic inequalities through their decarbonization actions will position their organizations as leaders.

These elements are essential for corporations seeking to decarbonise now and to flourish in a carbon-free future. By embracing these principles, companies can become significant “actors” in global decarbonisation and thrive in the new business environment, where change is constant.

The decarbonisation of the business world is both a collective journey undertaken as a corporate community and an often lonely and puzzling path for individual companies, the report concludes.

"Connectedness is not simply an essential element for each multinational corporation, but for the entire business world. The more connected, equitable, and transparent the global business environment becomes, the more agile, efficient, circular, and resilient companies across all industries can be."

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