Supporting companies for carbon reduction across the supply chain
Supply chain consultancy recommends cost-sharing and data-based approach
March 20, 2023, Boston, MA – Every industry, every company and its vendors, and every customer should be gearing up now to meet the 2030 and 2050 Carbon Neutral targets, according Jeff Staub, CEO, and Stephen Ottley, Senior Managing Director and Head of Chemicals & Energy, at SGS Maine Pointe, a member of the SGS Group. In the first of a three-part series, Energy Transitions Are Complex, Costly, and Essential, Ottley and Staub outline the requirements and risks of the Greenhouse Emissions Protocol.
The importance of alliances with competitors, vendors, and customers
“Companies are already forming alliances to share the cost and evaluate the technologies needed to avoid massive fines for noncompliance,” says Ottley. “If a company lacks the data to justify its position in those alliances, measure the effectiveness of technologies under consideration, and monitor compliance, it will fall behind its competitors and end up struggling alone.”
The authors explain that emissions may be direct, from sources a company owns; indirect, from the purchase of energy such as electricity; or complex, from a company’s customers, suppliers, and the suppliers’ suppliers. The entire end-to-end supply chain is a source of carbon emissions that each company is expected to address.
Many companies are dedicated to developing the carbon capture, utilization, and storage (CCUS) technologies that compliance will require. However, CCUS projects come with their own sets of risks. CCUS companies are often startup engaging in unfamiliar technologies with inexperienced leadership; they need to set up supply chains of their own and face potential funding issues. Carbon emitters must not only create alliances within their own industry in order to fund CCUS technologies but also figure out the best CCUS company to work with.
SGS Maine Pointe experts in energy transmission, energy transitions, and supply chain optimization have developed and initiated seven practical steps to take now, including creating a certified carbon footprint baseline; identifying potential CCUS technologies and partners; assessing supply chain risks; and developing a risk mitigation action plan. All these steps require supply chain optimization, energy transition, and data analytics expertise.
The importance of data analytics to establish an ROI for compliance
In his eBook, Maximizing ESG ROI through Advanced Analytics: Unlocking the True Potential, Nathanael Powrie, Managing Director, Data Analytics, at SGS Maine Pointe, asserts that a data driven approach to ESG initiatives such as carbon reduction can help mitigate costs by verifying data, monitoring the impact, and calculating the real ROI. He recommends beginning with by collecting and standardizing data, such as sustainability reports and regulatory findings, to establish a reliable, accurate baseline using statistical software, data visualization tools, and machine learning algorithms.
He states, “It’s important to integrate this data with financial data to understand the potential impact of ESG issues on a company's financial performance. This can help to assess the risks and opportunities associated with ESG factors and inform decision-making.” It also creates transparency with stakeholders, including investors, and with customers, employees, suppliers, and partners to provide a basis for ongoing commitment to carbon reduction goals.
To guarantee reliable data, companies must develop clear objectives, create consistency in internal measures, make compliance part of the company values, clarify roles and responsibilities, and eliminate silos that can result in uninformed decisions with unintended consequences. Procurement, operations, and logistics must work together, along with customers and suppliers, to ensure that carbon emissions reduction occurs across the supply chain and the product lifecycle.
About SGS Maine Pointe
SGS Maine Pointe, a member of the SGS Group, is a global supply chain and operations consulting firm trusted by chief executives and private equity firms to drive compelling economic returns for their companies. We achieve this by delivering accelerated, sustainable improvements in EBITDA, cash, and growth across their operations, procurement, and logistics. Our hands-on implementation experts work with executives and their teams to rapidly break through functional silos and transform the plan-buy-make-move supply chain to deliver the greatest value to customers and investors at the lowest cost and risk to business.
SGS Maine Pointe’s engagements are results-driven and deliver between 4:1-8:1 ROI. We are so confident in our work and our processes that we provide a unique 100% guarantee of engagement fees based on annualized savings. www.mainepointe.com
About SGS
We are SGS – the world’s leading testing, inspection, and certification company. We are recognized as the global benchmark for quality and integrity. Our 96,000 employees operate a network of 2,600 offices and laboratories, working together to enable a better, safer, and more interconnected world. SGS has been delivering ESG and sustainability solutions and services to clients for the past 25 years and has been a carbon neutral company for the past seven years.