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The supply chains of many manufacturing sectors went global when oil was cheap; today, improving energy efficiency is a top concern for executives. This interactive shows numerous opportunities to dramatically reduce energy costs in supply chains.
August 2009 • Tobias A. Meyer
Source: Climate Change Special Initiative
Supply chains have become increasingly global over the latter half of the century, as the globalization of trade was fueled by cheap oil. Today, the transportation of goods consumes 15 million barrels of oil a day—roughly one-fifth of total production.
Increasing the energy efficiency of supply chains
Explore levers for potential energy-efficiency gains in each stage of the supply chain.
In an ongoing study of energy efficiency in supply chains, McKinsey looked at numerous opportunities to reduce the amount of oil used to get goods from a manufacturer’s dock to a retailer’s shelf. These opportunities are available not only to manufacturers but to wholesalers, distributors, carriers, and third-party businesses. We’ve grouped these opportunities into six levers to illustrate possible next steps. Of course, the players in a chain operate independently from one another, so achieving all of these gains would require coordinated efforts and investments—a considerable challenge.
Finally, we examine potential gains in supply chain energy efficiency under three scenarios, based on low, medium, and high oil prices and electricity costs. In any scenario, however, companies would do well to set up energy-efficient supply chains, as their benefits greatly outweigh any downsides.
About the Author
Tobias Meyer is an associate principal in McKinsey’s Frankfurt office.
Pressure from environmental groups to stop selling unsustainably produced seafood
Friday, August 7, 2009 CBC News
Several supermarkets have taken steps to change their seafood policies.
A global study entitled History of Marine Animal Populations, presented in May at the Oceans Past conference in Vancouver, has intensified concern about the looming crisis. Marine researchers combing through historical records covering the past 2,000 years have determined there are 85 to 90 per cent fewer fish and marine mammals today than there once were.
Greenpeace mounted a coast-to-coast campaign this summer to persuade Canada’s major supermarket chains to stop selling seafood on its “Red list,” which lists species most threatened by overharvesting.
“We’re asking supermarkets to take the lead and stop selling unsustainably produced seafood now, instead of reacting later when it’s too late,” says Beth Hunter, Montreal-based oceans campaign co-ordinator at Greenpeace Canada. “Consumers may be unhappy if they can’t find their favourite seafoods at stores – but they’ll be even unhappier later if they disappear forever.”
Greenpeace’s pressure campaign is seeing some results, Hunter says. Loblaws has announced its policy will be to only sell sustainably produced fish after 2013; Overwaitea and Metro are taking steps to put similar policies in place after meeting with Greenpeace representatives.
“But Costco and several others don’t have policies yet,” Hunter says.
For their part, industry players say sustainability is easier said than done when it comes to fish.
“We all recognize we need to commit to doing the right thing – but the question is, what is it?” says Nick Jennery, president of the Canadian Council of Grocery Distributors (CCGD).
“There’s no consensus on what’s considered sustainable stock,” Jennery says. “If you look at all the NGOs and government, you get different lists of endangered species, although there is some overlap.”
Those selling farmed fish aren’t off the hook either, he says. Although these are renewable resources, environmentalists have issues because many crowded, badly managed operations generate pollution, disease and escapers that contaminate wild stocks.
Sustainability and Social Media : Is It A Natural? – Take 2
July 20, 2009
In May 2008, Intelegia examined the Dow Jones Sustainability Index – 10 Supersectors Leaders in terms of the use of blogs in their approach to corporate social responsibility (CSR) and sustainable development (SD). After conducting a thorough examination of the websites of the companies listed in the index, Intelegia discovered that Intel had a full compliment of Web 2.0 tools (i.e., blogs, podcasts, videocasts) and Web 1.0 applications (i.e., newsletter and news alerts) to deal with social responsibility issues. With the acceptance of online social networks as viable communication tools during the past year, Intelegia decided to conduct the same exercise with the Dow Jones Sustainability Index (2008 / 2009). The image below is the scorecard that was used to evaluate the company’s websites. (Please click on the image to few a full scale version of the table.)
Scorecard used to evaluate 10 Supersectors Leaders' websites. (Please click on the image to few a full scale version of the table.)
Please Note: Only online social networks that are mentioned on the company’s website are considered.
Findings from the study include:
- Of the 18 companies in the index, only two companies do not have a section of their corporation website discussing corporate social responsibility or sustainability development. Itausa-Investimentos Itau and TNT N.V.
- Intel still leads the way in terms of adopting Web 2.0 applications when it is comes to promoting their dedication to corporate social responsibility. This is seen through Intel’s official Facebook Fan page for their Inspired by Education project. Although not located in their CSR section, the company has a channel on YouTube titled, Channel Intel. It would not be a big shock if Intel creates a channel specifically for CSR content in the near future.
- adidas AG does not offer much in terms of Web 2.0 tools when it comes to CSR or SD however; looking at their products website is a different story. adidas.com offers an array of Web 2.0 tools such as podcasts
- Eni, an integrated energy has a collection of videocasts discussing their various sustainability initiatives.
- Air France-KLM in the airline industry does not have a presence on Web 2.0 which is surprising. For a company that should be engaging with clients, Air France-KLM must begin an effort to use social media tools.
Canadians have a great deal to celebrate when it concerns their environment, write Kenneth Green of the American Enterprise Institute and Ben Eisen of the Frontier Center for Public Policy. Over the past 30 years, Canada has cleaned up its air and water, preserved ecosystems and timberlands and protected the soils, while simultaneously sustaining strong economic growth. Of course, there is still more that can be done, but Canada is well on the way toward environmental sustainability, they say.
The report, The Environmental State of Canada–30 years of Progress, was authored by Frontier advisor Kenneth Green (D. Env.), and Frontier analyst Ben Eisen (M.P.P.). Some of the findings from include:
• On air pollution: levels of sulphur dioxide and nitrogen dioxide are much lower in Canadian towns and cities than they were just a few decades ago. For readings of ground-level ozone and fine particulate matter, there has been neither a measurable drop nor a measurable increase since the early 1990s.
• On greenhouse gas emissions, Canada’s emissions have increased by over 20 per cent since 1990. However, greenhouse gas emissions per unit of GDP (which accounts for population an economic growth and is measured as GHG emissions per unit of economic productivity) dropped 18 per cent in real (inflation-adjusted) terms between 1990 and 2005.
• On freshwater quality, more than twice as many monitored sites fell into one of the top two designations–good and excellent, than fell into one of the bottom two designations (marginal and poor).
Canada’s record in this area is also strong compared with its peer countries. Canada has the second-highest level of water quality among G8 countries, behind only Italy.
• On freshwater withdrawals, Canada’s NAFTA trading partners, the United States and Mexico, withdraw 17 per cent and 19 per cent respectively of their renewable fresh water each year, Canada withdraws just 1.6 per cent of its resources — a very sustainable level–and could afford to share fresh water with countries around the world which are water-poor and which suffer from environmental health problems as a result;
For further conservation measures in Canada however, water pricing should be introduced.
• Canadian soil quality has improved dramatically in recent years. Whereas in the early 1980s, Canada experienced a significant annual net loss in the measurement of soil organic carbon, by the early 2000s, Canada enjoyed large annual net gains.
The percentage of cropland designated by the federal government as being at very low risk of wind erosion (the lowest possible designation) reached 86 per cent in 2001, up from 72 per cent in 1981.
• On ecosystem conservation, In 1989, just three per cent of Canada’s land area was protected by legislation. By 2003, that number rose to 8.4 per cent.
• On forestry, throughout the past decade, Canada’s total forest cover has held steadily at approximately 310-million acres, or 34 per cent of Canada’s land mass.
Top companies share anti-pollution patents
Big companies like DuPont and Xerox are breaking from tradition and sharing their normally tightly held patents online. The public domain patents were developed to help fight pollution, and the corporations hope to be seen as doing good for the environment.
The resource will allow anyone with a computer and an Internet connection to access the patents — including other companies looking to solve their own environmental problems without going to the trouble and expense of trying to reinvent anti-pollution devices created elsewhere.
Since the “eco-patent commons” launched in January after being developed by Geneva-based World Business Council for Sustainable Development, businesses have listed about 75 patents for such things as better ways to recycle cell phones and optical disks, several methods of cleaning up contaminants in dirt and ways of dealing with solvents. At least three have already been used by other companies.
“We are pleased that the commons is beginning to have an impact,” said World Business Council for Sustainable Development President Bjorn Stigson. He added that he hoped it will “be a positive contribution to the challenge of technology diffusion around the world” (Martin Mittelstaedt, Toronto Globe and Mail, Sept. 11).
World Water Week demands halt to food wastage
EurActiv.com, 25 August 2008 – Scientists and experts from around the world have warned that global food wastage must be halved by 2025 to meet the challenges of feeding the rapidly-growing population and preserving global water supplies.
Continued high rates of food overproduction and waste will not only cause food but also water shortages, according to a report by the Stockholm International Water Institute (SIWI), the Food and Agricultural Organisation of the United Nations (FAO) and the International Water Management Institute (IWMI).
The study, entitled ‘Saving Water: From Field to Fork – Curbing Losses and Wastage in the Food Chain’, was presented during World Water Week, which wrapped up on 22 August in Stockholm.
It warns that “tremendous quantities of food are discarded in processing, transport, supermarkets and people’s kitchens,” adding: “This wasted food is also wasted water.” In the US, up to 30% of food, worth some $48.3 billion, is thrown away each year, it notes, pointing to similar levels of waste in Europe.
“That’s like leaving the tap running and pouring 40 trillion litres of water into the garbage can – enough water to meet the household needs of 500 million people,” the report laments.
Global food needs are expected to roughly double by 2050. At the same time, dwindling oil reserves and increasing concerns about climate change are leading countries to invest heavily in biomass – meaning land for food production is also getting scarcer. What’s more, as countries like China and India get richer, demand for more water-intensive agricultural products, such as beef and bioenergy, is increasing.
Food prices have already begun to soar in recent months, causing riots in a number of poor countries, including Haïti, Mexico, Egypt, Morocco and Senegal. Furthermore, an estimated 1.2 billion people already live in areas where there is not enough water to meet demand, causing death, illness and disease related to bad sanitation.
“Weak policy, poor management, increasing waste and exploding water demands are pushing the planet towards the tipping point of global water crisis,” warned the report, calling on governments to place an effective water-saving strategy, requiring that food wastage be minimised, firmly on the political agenda.
Links
International organizations
- World Water Week: Water and Sanitation Looms Behind Food, Energy and Climate Crisis, Concludes World Water Week (22 August 2008)
- World Water Week: 50 Percent of Food is Wasted Causing Water, Food and Hunger Crisis, Says SIWI, FAO and IWMI (21 August 2008)
Press articles
- AFP: Wasted food draining the world of water, experts say
- International Herald Tribune: Water experts urge major cuts in food waste
Report Covers the Good and Bad in Agriculture Trends
World Business Council on Sustainable Development, 24 July 2008 – Changing diets around the world, loss of farmable land and water shortages are some of the main agricultural concerns highlighted in a new report from the World Business Council for Sustainable Development.
The group explains current and future issues in “Agricultural Ecosystems: Facts & Trends,” written in collaboration with the International Union for Conservation of Nature. (Link to the pdf)
The challenges facing agricultural ecosystems can have worldwide effects on food production and availability. The report acts a primer of what the main issues are, and what industry, businesses, government and organizations can do or support.
Around the world, soil and farmland is being lost or restricted as populations grow and through erosion and desertification. While some damage is irreversible, other areas can be revived with erosion control, terracing and physical and vegetation barriers.
Better crop and water management techniques have also been developed that reduce water needs and lower carbon dioxide emissions from agriculture. Conservation tillage is one method for reducing greenhouse gas emissions from soil being farmed, but the largest agricultural CO2 emissions come from converting forests and long-term grasslands to agriculture, a practice that has been linked to making room for more food crops as well as biofuel crops.
Most other agricultural greenhouse gas emissions are from fertilizer and livestock, which produce methane. A variety of companies have been integrating recovered methane from agriculture or landfills into their operations, turning the gas into power.
The report’s authors include some tidbits about food choices for readers to mull over, pointing out the production of meat, milk, sugar, oils and vegetables uses more water than production of cereals. As countries get wealthier, their per capita calorie intake also increases. Along with that, as richer countries consume more fruits and vegetable, that leads to fewer calories being produced per hectare of land.
Future Supply Chains Will Need Extensive Collaboration: Report
GreenBiz.com, 29 May 2008 – Suppliers and retailers will need to take advantage of collaboration to develop sustainable supply chains, according to a report.
Capgemini’s “Future Supply Chain 2016″ report looks at new concerns companies must take into account to improve their operations and reduce their impact on the environment.
Issues like carbon dioxide emissions, energy reductions and traffic congestion already are or will be just as important as current supply chain concerns such as on-shelf availability and cost efficiency.
Various collaborations are listed as part of what the report says a “future supply chain” will need in order to reduce its costs, use of energy, use of resources and CO2 emissions.
Supply chains will need to collaborate on warehousing and transportation, the report says. By sharing space and delivery systems, companies can reduce their physical footprint, drive down costs and cut their emissions.
Traffic congestion will continue to be a concern as more areas urbanize or urban areas expand. One solution the report puts forth is to develop city replenishment hubs, warehouses near urban areas where several retailers would keep goods to be taken in to the city. The companies would use a shared transportation system to reduce the number of vehicles on the road.
Companies need to start working with these concerns in mind, the report says, because external forces such as resource scarcity, urbanization and sustainability regulations are a reality or on the horizon.
FPAC Challenges Canadians to Commit to “No Good Paper to Landfill” Principle – Recycling rate in 2007 hits 58%, FPAC urges households to go further
<snip>Good recovered fibre from paper, newsprint or discarded paper packaging can be used in the production of new products. Moreover, diverting as much of it as possible from landfill reduces the amount of methane – over 20 times more potent than a greenhouse gas, such as carbon dioxide – emitted into the atmosphere.
FPAC said it is time for industrial sectors place environmental excellence at the top of their business agendas. Regardless of past performance, it is up to each sector – including forest products – to demonstrate leadership and set ambitious goals in an effort to create a better environment and attract the growing number of customers who will demand sustainably-produced goods.
“Canada’s forest products industry is committed to going further, and we encourage others to follow suit,” Mr. Lazar said. “As the world becomes increasingly preoccupied with climate change and sustainability, customers are asking more questions about where their products come from and how they are produced. For Canada’s forest products sector, this represents an unprecedented opportunity and a sweet spot we want to target.”
The industry’s track record is undeniable – FPAC member companies operate in a way that is environmentally responsible and socially desirable. Examples abound:
- Carbon emissions from Canadian pulp and paper mills are down 44% from
1990 levels, or better than seven times Canada’s targets under the
Kyoto accord.
- Increased emphasis on renewable energy use. Renewables, such as
biomass, account for 60% of the sector’s energy supply, up from 49% in
1990. The industry’s long-term goal is to be a net producer of
renewable power.
- The regeneration of forests, through planting over 600 million trees
annually. This is a key reason Canada retains 91% of its original
forest cover, more than any other country.
- And virtually zero deforestation in Canada, as confirmed by the UN.
Deforestation, largely through illegal logging and concentrated in the
southern hemisphere, is a significant source – nearly 20% – of global
greenhouse gas emissions.
Despite these accomplishments, FPAC believes it can do more. For instance, the industry – in a world first – pledged to become carbon neutral throughout all stages of the product life cycle by 2015, without purchasing offsets.
Canadians can be assured their forest products sector will do its part for the global environment, Mr. Lazar added. “It’s time for the rest of the world to follow Canada’s lead in sustainably managing forests – the world’s climate depends on it.”
The forest products industry represents 3% of Canada’s GDP, directly employs over 300,000 Canadians and is the economic backbone of rural Canada. FPAC is the voice of Canada’s wood, pulp and paper producers nationally and internationally in government, trade and environmental affairs. Canada’s forest industry is an $80-billion dollar a year industry and one of Canada’s largest employers, operating in over 300 Canadian communities, and providing nearly 900,000 direct and indirect jobs across the country.
For further information: Paul Vieira, Director of Communications, Forest
Products Association of Canada, (613) 563-1441 x: 323, (613) 884-3312 (cell),
pvieira@fpac.ca; Jeremy Dunn, Curve Communications, (604) 684-3170, (604)
726-8350 (cell), jeremy@curvecommunications.com; Laura Ballance, Curve
Communications, (604) 684-3170, (604) 771-5176 (cell),
laura@curvecommunications.com
The Renewables 2007 Global Status Report provides an integrated perspective on the global renewable energy situation. It gives testimony of the undeterred growth of electricity, heat, and fuel production capacities from renewable energy sources, including solar PV, wind power, solar hot water/heating, biofuels, hydropower, and geothermal.
The report is the product of an international team of over 140 researchers and contributors from both developed and developing countries, drawing upon wide-ranging information and expertise across technologies, markets, and countries. Sections include: Global Market Overview, Investment Flows, Industry Trends, Policy Landscape, and Rural (Off-Grid) Renewable Energy. The policy section provides overviews of: policy targets for renewable energy, power generation promotion policies, solar hot water/heating policies, biofuels policies, municipal policies, and green power purchasing and renewable electricity certificates.
The Renewables 2007 Global Status Report is published by REN21 in collaboration with the Worldwatch Institute and was compiled and written by Worldwatch Senior Fellow Eric Martinot. The report is 51 pages long and contains 24 illustrative figures and tables as well as extensive endnote documentation. By design, the report does not provide analysis, discuss current issues, or forecast the future.
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