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Sustainability in supply chain: “Don’t be afraid to ask”

by Editor

To ensure long-term competitiveness, companies must integrate ecological and social criteria into their target systems and their decisions – this is also the belief of a large proportion of the 200 logistics managers surveyed for the Hermes Barometer (74 percent). But where can companies start? Which measures are particularly effective? An interview with Anna Schuldt, business analyst and sustainability expert at Hermes International, a division of Hermes Germany.

Ms. Schuldt, surveys like the 15th Hermes Barometer on the topic of “Green Supply Chain Management” has revealed that the relevance of a sustainably designed supply chain for company’s own future viability has been recognized. For example around half of german decision-makers (56 percent) stated that they had defined ambitious targets for reducing CO2 emissions. Can you confirm these results from your own experience?

There is currently a change in thinking: Companies are becoming increasingly aware that reducing CO2 emissions is not only essential for the continued existence of our planet. The economic factors associated with the reduction of CO2 emissions are also becoming a focus of management attention.

As a result, suppliers are being asked to provide a transparent supply chain and to assume responsibility for sustainability issues. The targets set by companies are sometimes very ambitious and, in some cases, already implement the Supply Chain Act, which will come into force in January 2023. As a result of this development, our customers are also increasingly addressing the issue of a more sustainable supply chain.

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Are there parts of the supply chain where CO2 can be saved particularly efficiently? If so, what are these and how can companies leverage their potential in the best possible way?

There are many different starting points: With our focus on individual transport solutions by sea, air, rail and road, we recommend that our customers pay particular attention to the long haul. This is where a large proportion of CO2 is produced. At the same time, however, our customers feel they have the least say in the matter, which is why they lack ideas on how to reduce it. This is where we need to start.As an international logistics service provider, we deal with this section of the supply chain on a daily basis and can therefore provide our customers with optimum advice and support. Together, we analyze the transport structure of the main route, container utilization, on-carriage, and warehousing to uncover potential for optimization.In addition, there are, of course, numerous other ways to make the supply chain more sustainable and resource-efficient.

Against the backdrop of current events, topics such as near-sourcing, for example, have once again come to the fore. Among other benefits, near-sourcing – that is, moving business operations to a geographically closer region – can reduce CO2 emissions. Further, slow fashion, recycling or refurbishment the maintenance, refurbishment and resale of high-quality equipment/hardware) can also be sensible approaches to conserving resources and shortening transport distances.

What are the concerns that companies approach you with? Which questions come up particularly frequently?

For many companies, the reduction of emissions has been little or not at all in the focus of optimization efforts. As a result, there is often a lack of transparency: Where and in what quantities do emissions occur within our supply chain? In which areas is there potential for a more sustainable design? In the first step, we support our customers in analyzing existing data and then develop a customized strategy for reducing CO2 emissions – or other fields of action.

offset co2 emissons

Anna Schuldt, business analyst and sustainability expert at Hermes International, a division of Hermes Germany.

 

How do you, at Hermes International, support companies that want to save CO2 or fundamentally make their supply chain more sustainable?

At Hermes International, we work with a three-phase model: analysis, avoidance, reduction. Upon request, we can produce a corresponding analysis via our Business Intelligence Tool which is based on the transport data from our customers.

On the basis of this overview, we work together with our customers to develop opportunities for CO2 avoidance, e.g. by changing transport modes, better utilization of containers or a smart warehousing strategy.

In addition, we are currently working on increasing the use of modern, lower-emission transport carriers in the future and including an offset option in our offers.

Speaking of compensation: The offsetting of CO2 emissions is sometimes regarded as a “modern trade in indulgences”. What options do companies have in this context – are there differences in quality? What should responsible parties look for when selecting a compensation provider?

The avoidance of CO2 should always be at the forefront of considerations for a more sustainable supply chain. However, when all options for avoidance have been exhausted, additional offsetting is a valid and effective means of reducing CO2.

Companies that want to offset their CO2 emissions should look for the Gold Standard when selecting a provider and check whether the processes are certified, for example, by TÜV. At Hermes International, we work together with the Hamburg-based company Arktik. Arktik offers many different climate protection projects that are based on the Sustainable Development Goals. The offsetting does not only save CO2, but also improves the standard of living of the local population and preserves biodiversity.

High-quality offsetting does not always have to be cost-intensive and complicated. For example, Arktik can be used by companies without much effort. The additional costs pay off with an enormous effect: not only for the company’s own sustainability strategy and the associated external impact, but also for the local population in whose project area the offsetting is being used.

What advice do you have for companies that want to make their supply chain more sustainable? How can those in charge get started with green supply chain management?

Companies kick things off when they include the topic of “sustainability” or “green supply chain management” in their agenda. I strongly advise not to be afraid of the task. There are many ways to make processes more sustainable. Before taking on too much at once and, in the worst case, losing enthusiasm, leaders should start with a single improvement and then work their way forward – slowly but steadily. The most important thing is to start as early as possible: Now!

Ms. Schuldt, thank you very much for this interview.

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