Carbon Footprint in Supply Chain

The World Economic Forum characterizes the climate crisis as “a serious existential risk for our world”. It is stated that this great global danger is largely caused by companies. Moreover, according to the data, more than 90 per cent of the carbon footprint of companies originates from the supply chain created by their suppliers stretching from one end of the world to the other. Therefore, the biggest steps that can be taken to reduce the carbon footprint that causes climate change are the changes in companies and supply chains in this direction. For the measures that can be taken on issues that pose a climate hazard; businesses in the supply chain, national administrations, non-governmental organizations to contribute to raising awareness, and even end consumers sharing a common consciousness in terms of demands and expectations can help slow down the climate crisis.

Although supply chains generally account for the largest share of a company’s emissions, it is stated that very few companies still carry out carbon emission measurements to identify this problem. Making it compulsory for companies to have this measurement done can be listed as one of the steps to create a chain action movement in the supply chain. On the other hand, disclosure of greenhouse gas emissions produced in the supply chain is not yet mandatory for listed companies. Such a disclosure method greatly accelerates the action plan.

Measurement of carbon emissions is a laborious and time-consuming action. But with the artificial intelligence offered by new technologies, what would normally take several weeks can be reduced to 10 per cent or even less. Unfortunately, companies are not sufficiently aware of these investments and solutions. They may develop unnecessary concerns that measuring carbon emissions with new technologies may compromise the confidentiality of company information. However, in this method, there is no need to share any information other than basic financial data. Unfortunately, not many companies are aware of these solutions. At this point, companies need to raise awareness of decision-makers on key issues such as what role they can play in the climate action plan, the nature and scope of climate-related financial disclosures and be encouraged to reduce carbon emissions.

Fossil fuels cause the climate crisis. Experts say that the use of coal, oil and natural gas releases carbon dioxide into the atmosphere, which accounts for 70 per cent of climate change. This means that if urgent regulations are not taken in the supply chain in the use of fuels, the danger in climate change will increase.

Accelerating the energy transition based on renewable energy in fuel use instead of natural gas, oil and coal is one of the solutions that can slow down climate change. Measures such as investors supporting the use of renewable energy instead of fossil fuels, governments making investments and allocating resources to this field, and encouraging the use of renewable energy can increase energy security by limiting climate disruption.

Climate change is characterized by the United Nations as “the greatest threat to development”. Therefore, if companies take actions to prevent the increase in carbon emissions that cause climate change, it also means reducing development problems.

In order to reduce greenhouse gas emissions, it is necessary to create an economic systemization that will enable businesses to audit energy reports and reduce dependence on high emission fuel sources. Protocols, sanctions and incentives can help companies that produce with low carbon awareness to stand out in the economic arena. In the near future, experts expect that reporting on supply chain emissions will become mandatory and sanctions will be developed in this direction. Of course, in order for these to be of maximum benefit in practice, companies must develop exemplary behaviors in reducing carbon emissions in a transparent manner to contribute to the development of common awareness.

Companies need to be incentivized to become partners in a general movement, and regulations and implementation policies need to be enforced with specific sanctions. Governments, commissions, NGOs and climate support organizations can develop policies for this and provide more opportunities for companies implementing climate action movements. Global developments in this regard continue to develop promisingly.

While companies can contribute to the development of common awareness through awareness-raising activities, companies can also contribute to the development of common awareness.

For the transition to a low-carbon economy, companies’ awareness of their responsibilities and sharing awareness can turn into a triggering force. Measuring and explaining the carbon footprint, taking action in this regard, and working with suppliers that show sensitivity in this regard will help to move forward in this regard. Supporting high-level partnerships and industrial subsidiaries that advocate climate-related public policies, encouraging suppliers, service providers and customers who take meaningful steps for climate action plans also means supporting common consciousness.

Almost every corporate sustainability reporting program is developed based on the Greenhouse Gas (GHG) Protocol, which sets the standards for measuring GHG emissions worldwide. In order to ensure the implementation of climate action and sustainability programs based on these protocols by supply chain actors, binding actions can be implemented, such as offering various opportunities for implementing suppliers to come to the forefront or being preferred over others by companies and authorities.

It is critical for companies and administrations to develop a social stance on this issue in order to accelerate climate action in the supply chain. Raising awareness on climate change and developing strategic planning to take action in this direction should not be seen as a kind of ideological approach or a political attitude. In other words, before listing and implementing thousands of responsibilities that can be done one by one as action items, the development of the appropriate basic mentality and stance creates the necessary ground for sustainability.

Companies that want to develop a corporate stance on an issue should allocate resources for this and see the issue in a multi-dimensional way. In order to reduce the carbon footprint and encourage customers, suppliers and other collaborators to do so, reviewing corporate communication policies and utilizing the power of corporate social responsibility is a great driving force. Creative communication plans should be developed to publicize the development of operations to use low emission energy sources and renewable energies and to encourage other organizations to do so, and social responsibility resources should be created and supported with audited funds.

According to studies, companies with high awareness and consciousness of the problems created by climate change cope more successfully with crises arising from indirect/indirect climate crises than companies that do not take action on climate change for short-term gains. Businesses need to create proactive plans for emergencies upon events such as overheating, severe weather events and disasters in the world. Managers should be aware of their responsibilities in this regard and be able to lead the companies they manage.

Businesses and supply chains should assess the risks of how they will be exposed to potential future impacts of change. They should see analyzing climate risks as a kind of investment and develop their decision-making processes in parallel.

Developing a transparent, objective, stable and innovative management approach plays a critical role in combating the climate crisis. A professional strategic climate plan should be developed to take action in line with scientific research reports, protocols, sectoral decarbonization and agreements such as the Paris Climate Agreement and such climate partnerships, national and global commitments and measures. In the implementation of this planning, the climate action plan should be worked as a never-ending process by making arrangements with measurement, evaluation and reporting. By following the work of organizations such as UN Global Compact, UNEP and UNFCCC, which are climate improvement partners, companies and supply chains can jointly carry out social responsibility activities to contribute to them.

When companies implement their carbon footprint reduction targets with realistic steps, they can achieve these targets in the long term, achieve success in climate action and increase their motivation in this regard. In this process, following technological developments can offer opportunities such as high accessibility and favorable pricing, both in terms of measuring carbon footprint and reducing environmental costs. Considering that the steps taken and investments made for a sustainable life will lead to economic development and prosperity on the basis of companies in many ways, companies can implement new technologies in many areas. It can be considered in a wide scope for opportunities such as supporting public policies for sustainability, organizing relations in a way to serve common consciousness, maintaining company-specific climate activities, sponsoring the development of environmentally friendly technologies.