Supply Chain Decarbonization: What Actually Works?

We need to decarbonize our supply chains. It isn’t a vague or distant goal, a can to kick down the road. It’s an immediate necessity. Supply chains account for the vast majority of corporate carbon emissions — sometimes, more than 90%. Yet the way forward often seems shrouded in confusion, smothered by contradictory advice and empty talk.

So what works? What actually reduces emissions?

Identifying your carbon drivers. The first step to solving any problem is to define exactly what it is, and where it lies. In this case, that means pinpointing the main sources of carbon emissions. You can’t address what you don’t know exists.

If we look at a typical case study. The top two issues that telecommunications companies are focusing on are corporate social responsibility (CSR) risk and carbon reduction. These are addressed by helping suppliers identify areas for improvement. The suppliers then work to develop plans for reducing their emissions, while increasing overall sustainability and addressing issues associated with the welfare of their workers.

The results are impressive. In a typical case study, looking at CSR factors, suppliers cut overtime by 20% percent, workplace accidents fell by 25%, and productivity jumped by 10%. Money was saved, morale increased and risk eliminated. Regarding carbon in the telco sector, emissions at a product level were reduced by an average of 49% for infrastructure suppliers, and 29% for consumer products suppliers —all within a typical timeframe of just two years.

Breaking down the problem. Grand declarations achieve nothing if not followed by concrete action. To tackle supply chain issues, you need to dig deep and get into the details.

Lifecycle assessments (LCAs) of carbon emissions are essential. They break down a product’s existence into stages and show where emissions occur, be it at the raw-material, production, transportation or disposal stage.

Telcos using this approach resulted in their suppliers targeting specific, high-emission areas, making the necessary changes, measuring those changes, and reaping the rewards. And, using the same strategy on CSR-related risk topics, they found ways to lower costs, reduce staff turnover, and improve workplace satisfaction.

Working with your suppliers. No business can go it alone. Supply chains are webs, not silos, and tackling emissions requires cooperation and collaboration.

The Joint Alliance for CSR (JAC), a body of large telcos, has developed an approach by which members share the carbon-reduction burden, lightening that of suppliers, and raising supplier awareness as they communicate with one voice. 

For their part, suppliers establish baseline carbon footprints, set realistic reduction goals, and report their progress. The program ensures consistency, accountability and measurable impact. The lesson: Collaboration amplifies results.

Building circular economies. Waste is the enemy of efficiency. Circular economies tackle this problem head-on, ensuring that resources are reused instead of discarded.

Consider smartphones. These small devices pack a punch with respect to their carbon footprint, accounting for a whopping 10%, in some cases, of a telco’s Scope 3 emissions. And Scope 3, representing up to 90% of total supply chain emissions, is where the real decarbonization battle takes place.

Vodafone’s Asset Marketplace shows the power of circular thinking. Over three years, the initiative helped the company recover value from used assets that would otherwise have been lost, cutting masses of waste and reducing emissions while boosting operational efficiency.

The principle is clear: If you reuse it, you don’t need to replace it. Circular economies are climate-friendly, but they’re also good for your bottom line.

Committing for the long haul. Decarbonization isn’t a quick fix. It’s a long-term project, and companies must build resilience into their plans, ensuring that they stay on track regardless of what tries to knock them off course.

The past few years have tested everyone. Energy crises, geopolitical shifts, economic uncertainty — all these have eaten into our resources and consumed our attention. But companies with strong programs and long-term commitments have held firm.

Sustainability must be baked into your business strategy, not bolted on. Resilience comes from having a plan that adapts to changing conditions without losing sight of the goal.

Suppliers embracing this plan of action didn’t just cut emissions; they improved working conditions, reduced costs and increased productivity. This is what success looks like: Not big speeches or bold claims, but organization, determination and hard work.

John Spear is managing director of epi Consulting and general manager of the Joint Alliance for Corporate Social Responsibility (JAC).