The idea of a green supply chain is that sustainable environmental practices need to be incorporated throughout a businesses’ supply chain, both upstream and downstream.
The initial focus of much reporting legislation affecting larger companies, and consequential influence on smaller companies is on their own Scope 1 and 2 emissions. Frequently it can be found that Scope 3 emissions arise up and downstream.
For example:
A landscaping company may have quite modest emissions from their largely manual work laying paving slabs. In this case the significant emissions impact comes from the (upstream) manufacture of cement slabs that they use. Whilst the production process lies outside the control of the landscaper or their client, it is unrealistic to expect much short-term improvement in the emissions of the cement industry. The landscaper can choose to take the initiative and instead recommend alternative materials that have less emissions impact.
A company manufacturing outdoor patio heaters might have made significant improvements in materials and emissions efficiency of its factory. However even at zero emissions, there remains the huge (downstream) emissions impact of the use of equipment through use of the fuel gas. This looks insurmountable for the heater manufacturer – as alternatives fuels are not available. In this case the initiative might more easily be taken by the end user – who might question the need for the heater at all. They might not of course if it’s a pub where the heater serves to maintain a comfortable outdoor environment for smokers to drink more!
Soap or detergent production might involve high emissions arising (upstream) from production of palm oil and large emissions (downstream) from heating of water by users of the cleaning product. In both cases, there may be design changes to the product that could improve emission up or downstream.
Beyond the energy and emissions impacts, are two clear examples of adverse supply chain impacts. Lack of visibility of the inbound (upstream) supply chain can allow poorly administered suppliers of raw materials or finished goods, with indirect sourcing being a particular concern. Effectively consumer spending in the developed world can fuel practices in the developing world such as deforestation, hazardous mineral extraction, human rights abuses and child labour. Lack of visibility of, or accountability for, the (downstream) destination of products can lead to uncontrolled waste disposal of hazardous materials, recyclable equipment or plastics. In both cases, there is more that can be done by the company in the centre of the supply chain to help drive improvement through the rest of the chain.
Failure to act on upstream and downstream risks, will risk harm to others, and will, sooner or later come to harm the reputations and viability of businesses elsewhere in the supply chain.