Japan commits on carbon

The incoming Japanese government's commitments to carbon reduction will require lots of innovation – and will for sure impact the way we think in supply chain management.

Like lots of people, I watched with interest as Japan’s election results came out a couple of weeks ago.  A few days later, I also saw two really interesting statements on carbon emissions from Japan, which is the world’s second largest economy and fourth largest emitter.

First out was a commitment on September 7 for Japan to cut greenhouse gas emissions by a massive 25 percent on 1990 levels by 2020.  Second (which ironically I saw just before a plane ride over to Tokyo…) was that Japan’s bid for the 2016 Olympic games will be based around a "Carbon-Minus” commitment.

To achieve these kinds of goals, Japan will likely need new policies to incentivize reductions in carbon emissions across the economy.  What’s more, it will also need to see a big change in consumer and business attitudes – to enable the innovation and changed business practices required.

I’m sure that big manufacturers, shippers and retailers – typically those companies that have extended global supply chains – will take the frontline in reducing emissions over the next few years.  While there are loads of great examples of companies which already report their CO2 emissions in real detail – such as the work being published by the Carbon Disclosure Project – for many others I’m finding that this kind of level and accuracy of reporting is pretty new.  Research that Accenture ran late last year showed that even among the best performing supply chain organizations, only 10 percent are actively modeling and managing their emissions in any detail.

That’s a bit of a surprise to me, as there can certainly be some good dollar benefits from looking at things like product-level carbon emissions through the end-to-end supply chain.  I saw firsthand last week how a top retailer in Japan is working to minimize its environmental footprint through a re-thinking of its supply chain – it’s looking, for example, at its packaging requirements in detail, from design through into the store and then probably beyond.

Personally, I reckon trends like low carbon sourcing, packaging-free products, and mode switches to rail and water will all have to become much more important in a lower-carbon supply chain world.  The systems to manage the complex reporting and analytics required will also likely be important – such as supply chain “control towers” which allow data to be sucked up from all the various systems in the supply chain, and translated into single, meaningful carbon numbers for carbon labels.

I’ll take a look at carbon labeling in a bit more detail in two weeks time – but I’d love to get your thoughts and comments in the meantime!

An introduction...sustainable supply chain management

I am really pleased to be writing a regular blog for DC Velocity and look forward to connecting with readers through this new format.  For many years now I have been leading supply chain transformation programs for leading global enterprises in the retail, consumer products and high-tech industries. Throughout my professional life I have also been an advocate of green supply chains and have been leading the development of Accenture’s thought leadership in this area, including our research work with the World Economic Forum.

Over the coming months I plan to write twice a month on the topic and I hope together that we can push this imperative further up the board agenda. This is, or will become, one of the most critical factors facing supply chain managers and indeed corporate board directors.  Together I believe that we can truly make a difference in the way we do business, to keep our shareholders happy, our CFOs happy, to meet the demands of our customers and to drive clear, socially-responsible corporate agendas. 

The first step is linking supply chain programs that reduce a business’s impact on the environment to the bottom line.  This continues to be a stumbling block for many of the organizations I work with, particularly as all are operating in a recessionary environment with increased pressure to reduce costs.  Although some people believe sustainable strategies and cost reduction--or even revenue generation--are mutually exclusive concepts, many companies have in fact made progress in this regard.   But what does it take to do this?  I look forward to unraveling some of the answers to this challenge, together with our readers, over the coming weeks and months…