What produces 5.5 times more greenhouse gas emissions than your company’s own operations? Unfortunately, it’s your supply chain. But there is some good news—you have considerable influence over those emissions. By making your supply chain more sustainable, you can extend your environmental efforts far beyond your office walls.
At Bullfrog Power’s Greener Horizons event in Vancouver, our panelists shared how they’re reshaping their supply chains to benefit the environment and their business.
Get to know the experts:
Tim Reeve, President of Reeve Consulting. Tim, our moderator and a thought leader in sustainability strategy, works with clients in the public and private sectors to address the social and environmental impact of their supply chain.
Denise Taschereau, CEO of Fairware. Fairware provides sustainable promotional merchandise with the mission of changing the world through the simple act of buying. Their focus on ethical sourcing, sustainable products, and greening their operations make them leaders in supply chain sustainability.
Dean Chamberland, Senior Account Manager, Tech, Commercial Markets at RBC. RBC has a purpose-driven, principles-led approach to delivering leading performance, and creating value for their clients and communities.
Louise Nagy, National Director Community & Environmental Sustainability at LifeLabs. LifeLabs is a Canadian-owned company that provides laboratory tests to help detect, prevent, and monitor diseases. They’re building a sustainable organization though their technical expertise, with a focus on creating a healthier community, environment, and business.
Follow these tips from our panelists to join the ranks of organizations that are taking action to address their scope 3 emissions.
- Purchase locally made goods. As a product-based company, it’s crucial for Fairware to ask their suppliers the right environmental questions. One of the most important questions for Denise is whether goods are being made locally, as they won’t have to be shipped as far and they may be subject to more thorough environmental regulations.
- Consolidate and optimize transportation. As Canada’s largest diagnostics lab, LifeLabs has a complex supply chain that includes internal couriers. As many of their locations are in rural areas, these couriers drive 17 million kilometres every month. To reduce their environmental impact and eliminate third-party transportation, LifeLabs now has their couriers deliver supplies and dispose of waste while they pick up medical specimens. They also use route optimization software to reduce emissions and increase cost savings.
- Avoid air shipments. Fairware pays close attention to the CO2 hierarchy of different modes of transportation. While distance travelled is an important carbon footprint indicator, how a product is shipped often has a greater impact. Perhaps surprisingly, ocean transport has the lightest impact, followed by train, truck, and plane. Fairware stresses the importance of planning ahead to avoid the need for speedy air shipments, which produce nearly 60 times more CO2 emissions than ocean transport.
- Offset your shipping. Shipping adds more to Fairware’s carbon footprint than any other aspect of the business. They’ve committed to reducing these emissions in 2020, and they’re turning to offsets in the interim. Reducing your emissions is always better than offsetting them, but carbon offsets are a convenient and effective option for when reductions aren’t possible—such as when a company doesn’t have direct control over the supply chain’s emissions.
- Embed sustainability into your vendor selection process. Reeve Consulting encourages their clients to give sustainability more weight in the RFP matrix. At 5 points out of 100, it isn’t having enough of an impact. Tim noted that weighting pricing highly is a waste of points when price isn’t a differentiating factor—some of those points can be reallocated to sustainability. By making environmental and social criteria a priority at the beginning of the RFP process, LifeLabs has found opportunities to collaborate on sustainability initiatives with their partners. Their next step is to define sustainability targets and metrics around procurement.
- Look for third-party accreditation. As small companies, Fairware and LifeLabs aren’t able to verify all of their vendors’ sustainability practices. They look for third-party certifications such as the SA8000 Standard, and accreditation from the Fair Labour Association and the International Organization for Standardization. For services that may not have third-party accreditation, like IT or catering, Fairware made an supplier code of conduct. By investing time in creating these environmental standards early on, they removed any guesswork down the line.
- Budget for total cost of ownership. Tim lamented that annual budgeting cycles can prevent the adoption of greener products and technologies that have a longer payback period. He recommends aligning your budgeting process with a total cost of ownership model, which could advance your sustainability initiatives and save you money in the long run. “That would be real leadership,” he said.
- Share your knowledge. Dean noted that RBC is able to share their internal knowledge to positively influence the supply conversation with many of their customers. They use artificial intelligence to help their retail customer base find the best locations for new business ventures. This technology helps them be profitable, and staying in business avoids emissions-heavy consequences such as moving or sending items to landfill. Unexpected and innovative sustainability techniques can create a ripple effect when shared with the internal and external supply chain.
- Nurture accountability. Denise remarked that the more your leadership team speaks publicly about sustainability, the harder it is to walk back on environmental promises. She recommends encouraging your CEO to get on speaker panels and share their passion wherever possible. Tim added that building on success stories is a great way to get the leadership team talking. He suggests feeding the CEO news about any sustainable, ethical, or Indigenous sourcing that your group is doing. By retelling those stories, they may get inspired to start new initiatives.
- Leverage your influence. As a large company with considerable purchasing power, RBC has the opportunity to move the needle on sustainable supply chain practices. Approximately 15% of their workforce is in computer programming, and they engage large tech customers whose computer systems have a considerable environmental impact. Dean explained that RBC leverages its buying power to support innovative, sustainable new hardware and chip processing sources. But you don’t need to have RBC’s scale to make positive change—simply telling your suppliers that you’re interested in sustainable options can help create the necessary demand.
- Turn your CEO into an activist. Denise has seen an uptake in CEO activism in the wake of this summer’s climate strikes. More than 140 CEOs signed B Corp Canada’s statement in support of climate action, and she’s seen more and more leaders who are hungry for change. If your senior management is concerned about how climate change will impact the planet and the business, be sure to harness that passion. Denise recommends asking the CEO to put sustainability-related targets into the senior leadership team’s bonus compensation program. “If there’s one thing that your CEO could do to move the dial for the organization, that’s it,” she said.
- Extend your sustainability team’s reach. Fairware noted that many purchasing decisions are made by office administrators or marketers, who may not be as involved in the company’s environmental efforts. To make sure everyone in the company is on the same page as the sustainability team, Denise recommends making a sustainability toolkit for purchasing, implementing a buddy system, or inviting the office administrator to your supply chain meetings. To go a step further, you can also have your sustainability team host lunch and learns for your supply chain partners.
- Share your success stories. LifeLabs recognized the importance of having employees participate in their sustainability journey, so they make sure to celebrate and promote internal success stories. For example, shipments of petri dishes used to be packed in Styrofoam until an employee suggested that they be packed in the gel ice packs that the lab needed anyways. LifeLabs worked with their vendors and supply chain team to implement this change, and they shared the news across their organization. By celebrating your success, you encourage employees to come forward with other ideas and to consider what sustainability means to your organization.