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Focus on eliminating supply chain emissions

Tue 26 Jan 2021 | 08:14 am GMT
Michelle Urquhart | Products of Change Writer

Cleaning up supply chains will reduce emissions. IMAGE: Frauke Feind from Pixabay

Eight global supply chains account for more than 50% of global emissions and fully decarbonising these would add just 1%-4% to end-consumer costs for many everyday items. New research published by the World Economic Forum and Boston Consulting Group (BCG) shows how tackling supply chain emissions can be a game changer in the global fight against climate change. Net-Zero Challenge: The Supply Chain Opportunity analyses the top eight global supply chains that account for more than 50% of global greenhouse gas emissions and finds that end-to-end decarbonisation of these supply chains would add as little as 1% to 4% to end-consumer costs in the medium term. The report breaks down the major sources of emissions along each of the eight major supply chains—food, construction, fashion, fast-moving consumer goods, electronics, automotive, professional services, and freight. It assesses the key levers to reduce emissions in each supply chain and shows that many can be easily deployed today and cost very little to implement. The opportunity for impact is especially high for consumer-facing companies, whose supply chain emissions far outweigh their direct emissions from manufacturing. These companies can use their buying power to push for rapid decarbonisation and help fund the transition by co-investing with upstream raw-material producers, which struggle to finance the transition alone. Patrick Herhold, the report’s co-author and managing director and partner at BCG’s Centre for Climate Action, said: “The argument that costs are a major barrier to reducing emissions is increasingly flawed—around 40% of the emissions across the eight major supply chains we analysed can be eliminated with measures that bring cost savings or are at costs of less than €10 per ton of CO2 equivalent. Increasing process efficiency and the use of recycled materials, as well as buying more renewable power, provides companies with major climate gains at very low costs.” Download the report: Net-Zero Challenge: The Supply Chain Opportunity
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