Tips for Managing Greenhouse Gas Emissions in the Supply Chain – Part 2

By: Alexandra Kueller

Last week, we published a blog post that highlighted some of the ways to help get your supplier to reduce greenhouse gas (GHG) emissions based on a report that BSR produced. The focus on part 1 was where to start when trying to reduce GHGs; this week, part 2 will focus on moving forward with your supplier.

Once you establish that you not only are committed to reducing GHGs in the supply chain, but also can provide the direction to do so, then it’s time for you to start looking to the future and think of ways you can move forward with your suppliers. The two points below – Reward the Suppliers and Build the Market – are key ways that you can improve GHG emissions in your supply chain:

Reward the Suppliers

What happens when you have suppliers that want to reduce GHG emissions, but the right incentives aren't there? Maybe it’s time to start considering potential incentive programs, such as rewarding suppliers for investment and performance in GHG reduction. Providing that extra motivation for suppliers might be the key to allowing reductions to soar.

One such way is connecting the suppliers to the benefits of GHG reductions. Sometimes the cost savings of reduction (IKEA and Dell are just two of the many companies that take this route) or potential government incentives are not as apparent right away and you might have to show the supplier their options to help motivate them.

Another way to keep your suppliers engaged is by rewarding them directly from your business. BSR lists some possible ways to reward your suppliers – both in financial and non-financial ways:

  • Sponsor energy efficiency audits, training, and project planning for the suppliers who are willing to commit
  • Initiate a pilot project with a leading supplier and provide support throughout – this can be later used as an example for other suppliers
  • Get your public relations team involved and generate publicity through news articles to help make the supplier more visible to other potential clients
  • Integrate energy metrics and scorecards in procurement conversations with suppliers

Build the Market

While you might have the plans and the direction of where your company is going, sometimes efficiency services are still developing in many regions and long-term GHG reduction projects face many barriers. By helping build that market through partnerships, you can help create an opportunity to allow future emissions reduction projects to flourish.

Some of the ways to help build the reductions market is by making the most of existing opportunities and by engaging in industry collaborations. While a region might still be developing the GHG reductions market, as a buyer you can look to see what expertise, information systems, and financing is already in place in those regions.

Ways Forward

It’s never too early to start looking ahead. Here are some ideas to keep in mind as your company moves forward:

  • Research will help shed light on opportunities with the greatest potential
  • Sharing of your company’s best practices is essential to help engage other companies
  • Continuation of cross-sector partnerships to help to standardize GHG measurement

If you want to learn more about sustainable supply chains, you can do so by reading our white paper.