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This article is provided by BRC Associate Member IBM.

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THE defining challenge of our time

Human-induced climate change is the defining challenge of our time. Our planet is already suffering dangerous and widespread disruption, impacting both the environment and the wellbeing, security and even the lives of billions of people across the globe.

Greenhouse gas emissions (Scope 1, 2 and 3) are recognised as THE fundamental driver of climate change and global warming. Experts, campaigners, and legislators are advocating for the reduction of greenhouse gas emissions; such action could help to alleviate, or perhaps even reverse the damage being caused to our world.

Scope 1 (GHGs released directly from a business’ own operations), and Scope 2 (indirect GHGs released from the energy purchased by an organisation) emissions are relatively straight-forward to measure and report. However, Scope 3 emissions (indirect GHGs released from the upstream and downstream supply chain, outside of the reporting organisation’s direct control) are far harder to accurately monitor, record and reduce due to the complexity of today’s multi-tiered, global and even local supply chains which are made up of a diverse ecosystem of partners at every stage of the value chain.  

Therein lies the challenge: 75% of all GHGs are generated in the supply chain; any undertaking to reduce worldwide GHG emissions will only ever be of limited success if the supply chain is not the central focus for change.

An insurmountable problem

Despite widespread acknowledgement that the consequences of inaction in the battle against climate change could be catastrophic, little has really been done to halt the damage, let alone beginning to reverse it. Why?

Historically two factors stand out: the drive for profit, and the sheer scale and complexity of the problem.

Fortunately, a seismic change in popular opinion has brought the issue of Sustainability, and the overriding imperative to do something about it to the forefront of the world’s collective consciousness. Yes, there are still climate change naysayers, but an ever-increasing majority of legislators, investors and above all consumers are forcing businesses to confront and reduce any adverse impact on the environment or the societies in which they operate. Nowadays, Sustainability makes good business sense; it underpins the quadruple bottom line of Profit, People, Planet and Purpose.

However, despite the step-change in attitude towards sustainability and ESG (Environmental, Social & Governance), the fact remains that reducing GHG emissions in the supply chain is still an enormous task. Faced with such an arduous challenge, organisations (and even nations) have expressed frustration, not knowing where and how to start their sustainability transformation.

Unfortunately, there is no silver bullet for the problem. But is that really the case?

The same business priorities…

In the past, supply chains have been designed and run to minimise wastage and costs; efficiency has been a fundamental contributor to profitability. Improving the transparency of the supply chain, leveraging emerging technologies like IoT, Blockchain, Cloud, Edge and Analytics has uncovered a wealth of data that organisations have used to improve efficiency and to drive out waste at every stage of the supply chain. Success has been driven by organisations monitoring, measuring, reporting, analysing and then acting on data to make informed, commercially advantageous business decisions.

…but with a new focus and an even more pressing need

Why not refocus what organisations have done so successfully in the past and apply it to the problem of climate change? By doubling down on supply chain efficiency, working through a sustainable practices’ lens, organisations can reduce wastage of valuable resources. Additionally, choosing alternative sources of renewable energy other than fossil fuels will reduce associated emissions and lessen the carbon footprint of the supply chain. And that could be just the start.

Achieving Net Zero emissions by 2040 will help to mitigate climate change and limit global warming. Reducing Scope 3 emissions, which represent >90% of all emissions, will be vital for organisations and nations to achieve their targets before it’s too late. Visibility of accurate, reliable data in both the upstream and downstream supply chain is the key to addressing the Scope 3 challenge.

Being able to track, measure and reduce Scope 3 emissions therefore represents one of the biggest challenges for UK retailers. In partnership with the BRC we have created a guide ‘Monitor, Measure and Report Supply Chain Scope 3 Emissions’. This Guide explains more about Scope 3, provides frameworks and strategies for how retailers can gain better visibility and improve reporting of their Scope 3 emissions; and how retailers can work with their supply chain partners to identify where and how to achieve the greatest reductions.

Achieving sustainability demands transformation

Discover our new UKI Sustainability playbook for Distribution, which highlights the Supply Chain and Sustainability solutions of IBM Consulting and our global network of leading partners and how these can be applied to the demands of ESG and achieving Net Zero. The playbook explains how businesses can take the difficult first steps, turning intent into action focusing on areas such as: sustainable strategic design; sourcing & procurement; integrated risk management; sustainable finance; asset management & energy-usage optimisation, fit for the future factories & facilities: and networks & logistics.

The playbook also explains how, with sustainability at the heart of supply chain strategy and operations, organisations can leverage data and insight to go beyond mere compliance and take great strides on their sustainability-catalysed transformation journey.

There is a way, a new way

At IBM we firmly believe the challenge of Sustainability can be solved through data. By empowering organisations to monitor, measure, report and analyse data, IBM can help our clients not only to improve efficiency, drive out cost and improve supply chain resilience and security, but also to adopt sustainable business practices, significantly reduce emissions, ensure regulatory ESG compliance and demonstrate authentically ethical and responsible business practices to legislators, investors, and consumers.

What to do next

If you’re interested in learning more about how to continue your sustainability-catalysed transformation, or discussing the IBM UKI Sustainability Playbook  please reach out to:

Ursula Heng: Associate Partner UKI Sustainability Lead, Supply Chain & Procurement Practice, IBM Consulting
Ursula.Heng@ibm.com

Simon Glass (MCMI ChMC): Senior Managing Consultant Supply Chain Strategy & Process (SCS&P), IBM Consulting
glasss@uk.ibm.com