In a world increasingly aware of the environmental impact of business operations, sustainability has taken center stage across all industries. One of the key aspects of sustainability is the urgent need to reduce greenhouse gas (GHG) emissions, particularly carbon dioxide (CO2), which plays a major role in climate change.
Procurement, with its influence on transport and logistics, holds a unique opportunity to proactively address the expectations of a diverse range of stakeholders. From eco-conscious consumers to socially responsible investors, and even governmental regulators, businesses must step up their game.
When it comes to tracking emissions, there are three distinct scopes:
Scope 1: Direct emissions resulting from an organization's own operations.
Scope 2: Indirect emissions arising from purchased electricity or heat.
Scope 3: Indirect emissions occurring upstream or downstream, including those from suppliers.
Shockingly, research has revealed that Scope 3 emissions can account for up to a staggering 70%* of a company's total GHG emissions. It becomes crucial, therefore, to analyze all three scopes to gain a comprehensive view of the environmental impact and identify opportunities for emission reduction throughout the value chain. However, tracking Scope 3 emissions presents challenges due to the involvement of multiple players within complex supply chains.
The Profit and Loss Equation
While tracking emissions in sourcing is essential for businesses aiming to reduce their carbon footprint, a significant challenge lies in balancing CO2 emissions alongside profit and loss (P&L) impacts. This requires a shift in mindset and decision-making approaches that factor in the long-term environmental and social consequences of sourcing decisions. The task of reporting and making choices that consider carbon emissions alongside their impact on profit and loss is undeniably daunting.
These challenges can include:
Fortunately, companies can overcome these challenges and achieve their sustainability goals with the right tools and strategies in place.
Introducing Keelvar's Sourcing Ecosystem
In collaboration with Searoutes, Keelvar is revolutionizing sourcing by developing an ecosystem that empowers companies to provide comprehensive data, including CO2 impact, within the tenders they seek to run. Keelvar's sourcing optimization leverages powerful scenario visualization, allowing businesses to incorporate GHG emissions as a crucial buying criterion alongside price and service quality. By doing so, companies can address numerous challenges associated with sustainable sourcing, gain a better understanding of their carbon footprint, and take active steps to reduce it.
Companies now have the opportunity to conduct in-depth analyses to identify the optimal trade-offs and balances between suppliers, trade lines, trade routes, vessel strings, transit times, and CO2 costs. This comprehensive approach enables organizations to find scenarios that align with their goals while understanding the carbon and cost implications of their choices.
Empowering Data with Searoutes
To accurately measure and present GHG emissions, Searoutes provides companies with a reliable baseline. Relying solely on average trade lane CO2 emissions falls short in helping companies select the best carriers or routes and gaining an understanding of the CO2 risk distribution between carriers at service.
By calculating carbon emissions per port-pair, freight procurement teams can select more CO2-efficient carriers, ultimately reducing carbon emissions within their supply chains. This not only helps companies achieve their sustainability targets but also enables them to present a cohesive story to their leadership and stakeholders, demonstrating their investment in carbon footprint reduction and the tangible steps they are taking. Learn more in our Partners Tackling Carbon Emissions in Procurement datasheet.
In summary, the time for sustainable sourcing action is now. Through its partnership with Searoutes, Keelvar equips companies with accurate and comprehensive data on emissions related to transportation. By making informed decisions about supply chain logistics, understanding their carbon footprint, and actively reducing it, businesses can foster a more sustainable future.
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