Sustainability in Sourcing: A Fresh Take on Reducing GHG Emissions

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With sustainability becoming a cornerstone in modern business practices, companies are taking new approaches to reduce greenhouse gas (GHG) emissions. Sourcing optimization emerges as a pivotal strategy, enabling a holistic view of both cost and carbon footprint. This blog post draws insights from Keelvar's Buyer's Book Vol. III.

 

Redefining Modern Sourcing

In today’s fast-paced business world, sourcing isn't just about getting the best price – it’s about making choices that align with our values. Sustainability, particularly in reducing GHG emissions, has become an essential factor in the decision-making process. Let’s take a look at the world of sourcing optimization, which can aid these efforts.

 

The Digital Path to Decarbonization

The potential of decarbonizing supply chains with the help of digital transformation is vast. Many valuable environment-impacting data points often remain isolated within transportation companies. By integrating this data into actionable systems, businesses can make more informed and sustainable decisions. However, Scope 3 emissions, which originate from the deep recesses of the supply chain, often remain elusive. To truly make an impact, companies need to not only extract this data but embed it into their procurement practices. With sourcing optimization, this becomes possible, allowing for an extensive evaluation of suppliers’ emission data during the tendering process.

 

Trade-offs and Sourcing Optimization

Traditional eSourcing is evolving. The rise of sourcing optimization brings a multifaceted approach, allowing businesses to weigh various objectives against each other. For instance, while considering time and cost is essential in transportation, introducing the dimension of sustainability is pivotal. This enables companies to balance cost, service, and sustainability, offering a comprehensive view to guide executive decisions.

 

Tapping into Supplier Expertise

Suppliers are often more than just vendors – they can be partners in innovation. With varying solutions ranging from basic to premium, suppliers can provide diverse options. Encouraging suppliers to offer their more sustainable alternatives can unearth novel solutions, potentially revolutionizing organizational performance.

 

An example: A Focus on Road Transportation

Transportation is a significant contributor to emissions. Particularly in road transportation, understanding the components influencing GHG emissions is paramount. Factors such as fuel type, vehicle class, and vehicle age all play a part. In optimizing for sustainability, it’s essential to collect detailed data on these factors. This granular information allows for precise calculation of emission factors, considering gases like carbon dioxide, nitrous oxide, and methane. By integrating established emission factors, businesses can make accurate assessments and subsequently reward eco-friendly suppliers.

 

Journey to a Greener Tomorrow

As the business landscape evolves, sustainability in sourcing emerges as a critical component. By leveraging technology and data, businesses can not only optimize costs but also significantly reduce their carbon footprint. In this journey towards sustainability, collaboration with suppliers and a keen focus on areas like road transportation offer a promising path and the road to a greener future is paved with informed choices.

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