Carbon equivalent (CO2e)-neutral supply chains – more and more companies in the automotive industry are making the decision to drastically reduce CO2e emissions caused by their supply chains. Social responsibility, customer expectations and legal requirements are among the major reasons for this.
Especially for complex supply networks, for instance in the automotive industry, achieving CO2e neutrality can be a significant challenge. In order to achieve greenhouse gas-neutral transportation networks, companies need to develop a suitable strategy, anchor the strategy in their business processes and then define and measure the goals they have set.
A strategic approach for successful sustainability transformation
A holistically sustainable supply chain starts with the establishment and implementation of a sustainability strategy that is then applied to the relevant supply chain processes. Depending on the company’s industry and services, many elements are part of a sustainable supply chain; for the area of transportation, the reduction of greenhouse gas emissions is especially relevant.
Before opportunities for greenhouse gas emission optimization can be identified, transparency about emissions in the transportation network is required. Based on a transparent CO2e footprint, levers for reduction can be developed and prioritized – so that, in a first step, crucial areas for sustainability transformation are identified and then tackled.
In addition to the areas identified for optimization, processes along the supply chain must also be adapted to the sustainability strategy to meet the targets of a CO2e-neutral transportation network. This way, the strategy for a CO2e-neutral transportation network is anchored in a company’s entire process landscape. Planning, purchasing and controlling processes all need to be designed and adjusted according to a sustainable supply chain, while goals are defined clearly.
This kind of transformation requires a company to adopt a complete change in mindset. With change management, the entire organization is supported to implement the defined strategy while concrete measures are developed and applied to accomplish this. Ultimately, the measurement of success is a key tool for monitoring and achieving goals, and such measurements can be integrated into planning or transportation management systems.
Authors
Jan Oppermann
Head of Sustainability Practice at 4flow
Malte Vogt
Principal at 4flow
What makes a greenhouse gas-neutral transportation network successful?
Greenhouse gas-neutrality starts with avoidance and reduction. This can be achieved through the combination of different elements, i.e., alternative drives or fuels, low-emission modes of transportation, the selection of strategic networks and locations – and of course, significant decisions about footprints, local sourcing and local production. Furthermore, a holistic optimization of all modes of transportation – road, sea, air and rail – is vital for success. When it comes to reducing CO2e emissions, inbound and outbound supply chains should be considered equally, since both transportation networks offer significant CO2e savings potential. For unavoidable emissions, a sustainable offsetting approach is still advisable.
With a greenhouse gas-neutral transportation network, companies can get ahead of the competition while meeting their own corporate goals, legal requirements and customer requirements. In addition to a clear strategic approach, taking measures in different areas plays an important role. The path to CO2e-neutral transportation is achieved through the interaction of different elements, which when combined create real added value.
This is a translation of the original article, Greenhouse gas-neutral transportation in the automotive industry that was published in May 2023 in the business magazine: Transport, Die Zeitung fuer den Gueterverkehr