The report, titled “Supply Chain Decarbonization”, examines the role that the logistics and transport sector plays in reducing emissions, both in its own operations and by influencing shippers and buyers to undertake broader supply chain improvements. According to the report, logistics and transportation activities contribute approximately 5 percent of the 50,000 mega-tonnes* of carbon-dioxide emissions generated by all human activity annually.
The report reviews 13 commercially viable opportunities for reducing supply chain carbon emissions—within the logistics and transport sector as well as across the extended supply chain—and assesses them according to carbon-dioxide abatement potential and feasibility to implement. According to the report, the five opportunities with the greatest carbon-dioxide abatement potential and greatest implementation feasibility are:
• clean-vehicle technologies (175 mega-tonnes CO2 abatement potential);
• de-speeding the supply chain (171 mega-tonnes);
• packaging design initiatives (132 mega-tonnes);
• optimized networks (124 mega-tonnes); and
• energy-efficient buildings (93 mega-tonnes).
These five opportunities address emissions that originate within the logistics and transport sector and represent approximately one-half of the 1,440 mega-tonnes CO2 abatement potential presented by all 13 opportunities. While the remaining eight opportunities address emissions generated by shippers and buyers within their own operations, the report concludes that organizations in the logistics and transport sectors are in a position to influence shippers and buyers to collaborate across the extended supply chain in an effort to achieve the greatest de-carbonization impact.
“Clearly, the logistics and transport sector can contribute a great deal to the reduction of carbon emissions and obtain strategic business benefit from doing so,” said Narendra Mulani, managing director of Accenture’s Supply Chain Management practice. “However, the greatest strides will be achieved by collaborative end-to-end supply chain optimization that includes shippers and buyers in addition to logistics and transport providers.”
In addition to identifying the opportunities, the report also provides a number of recommendations, for logistics and transport providers as well as for shippers and buyers, to de-carbonize the extended supply chain. The recommendations for logistics and transport providers include:
• Adopting new technologies industry-wide;
• Improving training and communication industry-wide;
• Switching modes where possible;
• Developing recycling offerings;
• Developing home delivery offerings; and
• Promoting carbon offsetting of shipments.
Recommendations for shippers and buyers include:
• Understanding and reducing the carbon impact of manufacturing through alternative sourcing;
• Better planning to allow slower and better optimized transport;
• Reducing packaging materials;
• Improving carbon labeling, standards and auditing tools; and
• Increasing shared loading.
“This report makes clear the need to look strategically at the end-to-end supply chain to include all aspects of the product lifecycle, from raw materials to product disposal, when approaching the supply chain de-carbonization challenge,” said Sean Doherty, head of Logistics & Transport at the World Economic Forum.
About the Report
The World Economic Forum’s “Supply Chain Decarbonization” report is a comprehensive review of the scale of the logistics and transport sector’s carbon footprint, and the principal opportunities for near-term reduction of the sector’s emissions. Researched and co-written by Accenture, the report assesses the legal and commercial drivers for supply chain decarbonization. It establishes a framework for meaningful cuts in emissions across end-to-end supply chain and, through a series of scorecards, analyzes the relative importance of the main opportunities for change.
Accenture is a global management consulting, technology services and outsourcing company. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. With more than 186,000 people serving clients in over 120 countries, the company generated net revenues of US$23.39 billion for the fiscal year ended Aug. 31, 2008. Its home page is www.accenture.com.
About the World Economic Forum
The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas. Incorporated as a foundation in 1971, and based in Geneva, Switzerland, the World Economic Forum is impartial and not-for-profit; it is tied to no political, partisan or national interests (http://www.weforum.org).
*1 mega-tonne equals 1.1023 megaton
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