Measuring Carbon Productivity in Global Supply Chains
Measure to Improve - Carbon Productivity in Global Supply Chains
The increasing demand for decarbonization of transport and logistics has led to the development of several methods to estimate the GHG emissions of any given supply chain. The next step is measure the carbon productivity of the supply chains.
Carbon productivity is defined as the ratio between the useful transport of goods, and the GHG emissions generated by that transport demand.
The useful transport of goods is in essence independent of the means of transport or the route taken. The demand for the transporter is to take goods from the origin and bring them to a given destination.
The economic activities that demand the movement of goods from an origin to a destination are the driving force in a global supply chain. Thus, as the economy grows and becomes more diversified, this demand for movement will also grow. At the same time the Paris (COP21) agreements set a goal of more than 60% reduction of the absolute level of GHG emissions in 2050, compared to 1990.
The combination of increased demand for transport of goods due to economic growth and the demand to reduce GHG emissions associated with the same transport can be expressed in a desired carbon productivity increase.
The challenge is to measure the carbon productivity in global supply chains so that targets can be set, improvements can be designed, changes implemented and the effects monitored. This requires measuring in all parts of the world, in all kinds of circumstances and levels of development, in layered and diverse supply chains with many actors. And this must be performed in such a manner that these measurements can be added and combined and compared to generate a view of the total supply chain.
This is theoretically easy to define. In practice it is very difficult to execute for lack of practical approaches, lack of easy-to-use tools and a high threshold for participating.
Lean & Green has developed a practical and easy to implement method for measuring and analyzing carbon productivity in global supply chains, called Lean Global Analytics (LGA). LGA lowers the threshold for participating and the tools are available for everyone, even if you are not part of the Lean & Green community. LGA is applicable for companies ranging from SMEs who operate nationally, right up to multinationals with global and diverse supply chains.