Companies like IBM, Philips, and Toyota use blockchain, recycling, and trash management as some of their best sustainable supply chain tactics.
Sustainability in the supply chain is now a top priority for businesses all over the world, and many have made a promise to reach net zero by 2050.
In fact, Deloitte says that around 70% of business emissions are Scope 3 emissions, which are those that happen all along a company’s supply chain. Because of this, it’s very important for business leaders to come up with a supply chain plan to deal with this pollution.
Remember that sustainability isn’t just about lowering pollution. Modern companies that want to stay in business need to also cut down on waste, protect resources, and give providers more power. A green supply chain plan should take all of these things into account.
Today, we’re going to talk about 10 of our favorite sustainable supply chain strategies. These show how modern businesses are coming up with new ideas and spending money on environmentally friendly solutions.
Packaging in a circle
Several important companies
The main gain is less plastic being made.
Diageo, a British company that makes drinks and is one of the biggest in the world, is responsible for a huge amount of packaging. However, they are working to reduce the plastic effect of their brands. Irish beer Guinness, which is one of its most popular goods, is now packed in no plastic at all.
Guinness cans are no longer sold in plastic ring packs. Instead, they are stuck together with glue or come in cardboard that can be recycled or broken down naturally. In an attempt to reduce waste even more, Diageo has taken all of its beer goods out of the plastic shrink-wrapping process.
Instead of putting the responsibility on customers to act in a way that is good for the environment, this approach delivers eco-friendly solutions from the top down. Country Director of Diageo Ireland Oliver Loomes says, “Managing our environmental impact is important for the planet and the long-term health of our business.”
9. Using sustainable sources
Important businesses: Nestlé
Main benefits: better security for people and the environment
Nestlé gets many of the items it needs for its goods from farmers in dozens of different countries. This makes sense since the company has more than 2,000 brands.
Sustainable management of a huge global supply chain can be hard, but Nestlé says it will get all of its food “responsibly” by 2030. Being responsible means that the food and drink giant thinks about “farming practices, how they affect forests and natural ecosystems, and how much human rights and animal welfare are respected by growers and suppliers.”
Coffee and cocoa, two of the company’s main products, are already found in a way that doesn’t harm the environment.
There are many more supply lines that Nestlé needs to work on now.
8. Using renewable energy in business
Some important companies are:
Main benefits: less pollution from Scope 1 and 2
Walmart, which is the biggest grocery store company in the world, wants to use green energy for half of its operations by 2025. The business already has more than 600 green energy projects in different countries and has deals in place for more than 5 billion kWh of wind power each year.
Because of these steps, Walmart has saved more than 2.3 million metric tons of CO2e by using less energy. The Walmart team also wants to grow the company’s solar power by 1,000% by 2030, with the goal of running the whole business on renewable energy by 2035.
Even with these good changes, Walmart’s most recent carbon report (2022) showed that its yearly Scope 1 emissions were the highest they’ve been in almost ten years.
7. Greener ways to get around
Important businesses: IKEA
Less carbon gas pollution are the main gain.
The king of home furnishings For a number of years, IKEA has had a delivery service. However, the Swedish company is now getting rid of a lot of its gas-guzzling delivery cars in order to reduce the amount of carbon dioxide put into the atmosphere.
All IKEA supplies in Shanghai are already made by electric cars, which cuts CO2 pollution by more than 300,000 kg per year. The goal is to offer this service in over 300 more big towns by 2025. IKEA also wants to make the best use of its transport lines so that the ICE cars it still has use less gas.
6. Using less water
Important businesses: PepsiCo
Main benefits: Keeping water from running out
PepsiCo, a company that makes soft drinks, wants to have a much smaller effect on the world’s water supplies soon. PepsiCo wants to restore more water than it uses in high-risk places by 2030 as part of its “Positive Water Impact” plan.
It’s important for PepsiCo to make sure there is enough water for everyone, since its entire business depends on healthy world water supplies. With that thought as its guide, the American drink giant has cut the amount of water it uses by 15% since 2015.
In total, its CSR and ESG activities have helped just under 70 million people get clean water.
5. New ideas for sustainable packaging
Companies that matter: Procter & Gamble
Main benefits: less trash
One of the hardest things for businesses these days is getting rid of plastic waste that isn’t needed in their supply lines. As the biggest consumer goods company in the US, Procter & Gamble takes its responsibility to be a good caretaker of plastic products very seriously.
P&G is currently working on new, eco-friendly ways to package their products, such as making the first paper bottle for Lenor fabric cleaner. The company wants to get rid of all single-use plastics from its supply chain by 2030 so that all of its products can be recycled or used again.
A big part of P&G’s sustainable plan is to cut down on waste in the supply chain by making smart design choices: “Science and life cycle thinking guide us. We know that we need to look at how material choices affect people over time to help us make design decisions.”
4. Working with suppliers
Important businesses: Apple
Sharing skills and investing in green energy are the main rewards.
The “Supplier Clean Energy Program” from Apple was created in 2015 to lower the carbon footprint of its global supply chain. It does this by helping and pushing its vendors to switch to green energy sources.
Since then, it has helped more than 200 providers switch to energy that comes only from green sources. This has cut Apple’s supply chain by 13.9 million tonnes of CO2. Apple does more than just give its sellers money. It also trains them and gives them tools on how to save energy and reduce waste.
3. No trash going to the dump
Brands that matter: Toyota
Main benefits: less trash and more recycling
Toyota has been around since the late 1930s, and having been environmentally friendly for a lot of that time. Toyota built a zero-pollution garbage dump next to one of its plants in the 1970s to make it “the cleanest vehicle manufacturing environment in the world.”
In the years since then, Toyota has started energy production and water treatment programs on-site, as well as a drive to get the whole company to deal with garbage better.
The Japanese car company has kept more than 1.5 million tons of trash out of landfills and into recycling plants thanks to this effort. The effort has been strict from the start, with recycling programs for everything from papers to trash from the canteen.
2. Making products that last
Important businesses: Philips
Main benefits: lower prices for production and selling, and longer product life.
The Dutch company Philips makes home and hospital tools. It has started using sustainable product design and wants to get 25% of its income from used goods by 2025.
The Better Than New ad by Philips is all about all the good things about refurbishing, like saving money and making less waste. Smart product design choices have made this campaign possible by making things simple to take apart and simple to put back together with new parts.
For example, Philips’ medical imaging systems are made with materials that can be reused 90% of the time. This means that these pricey pieces of equipment last a lot longer. Since 2015, this method has cut the carbon footprint of goods by 7%, and more cuts are likely as refurbished products are sold around the world.
1. Blockchain
Company names: IBM
Main benefits: more openness in the supply chain in seconds, more flexibility, and higher efficiency
You may have heard a lot about blockchain in the past few years if you follow the business and tech worlds. But if you’re not, the idea can be hard to understand.
Basically, blockchain is a way to use advanced systems to keep track of exchanges of money, goods, and just about anything else. Like its name says, blockchain will keep track of every step in the supply chain if Vendor A gives Product B to Buyer C.
Also, if Buyer C later decides to sell Product B to Buyer D, blockchain will keep track of that exchange too. This makes it possible to see exactly where goods and services come from.
IBM is the market leader in blockchain technologies and has created a blockchain-based supply chain tool that makes global networks more open and easy to track.
For example, the IBM Food Trust project makes it possible to track food from the farm to the shop in seconds instead of days. Big stores like Walmart and Carrefour use this method, which makes food safer and cuts down on waste.
Thanks to IBM, Walmart can now find out where sliced mangoes came from in 2.2 seconds, whereas it used to take almost seven days. In test projects, the tool has also helped cut down on food waste by up to 30% by making inventory control more accurate.